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CONTENTS 

Republican Campaign Documents 

ISSUED BY 

The Republican Congressional Committee, 
WASHINGTON, D, C* 



y(l2) Protection and Reciprocity; speech of Hon. L. D. Apsley, of Mass., on 
^ the repeal of the McKinley law and its effect, delivered in May, 1896. 

8 pages. 
m4^) Three Evenings with Silver and Money; a talk of four neighbors about 
^ the financial issue. 40 pages. 
(14) Speech of Hon, John G. Carlisle, Secretary of the Treasury, delivered 
y to the workingmen of Chicago, April 15, 1896. 20 pages. 
, (15) The Treasury Condition— 16 to 1 Free Silver; speech by Hon. Nelson 
/ Dingley, Jr., of Maine, February 5, 1896, on the currency question, with 

incidental relation to revenue. 16 pages. 
<(16) Silver and Wheat; a speech by Hon. Martin N. Johnson, of North 
Dakota, in the House of Representatives, February 6, 1896. 16 pages. 
jyfi?) McCleary's Silver and Gold, Wages and Prices; speech of Hon. James 
T. McCleary, of Minnesota. 16 pages. 

(18) A Populist Humbug Exploded; refutation of the " seven financial con- 
^ spiracles " and a discussion of the charges made by Populists and 

Silver leaders relative to Republican financial legislation. 20 pages. 

(19) An Honest Dollar needs no Apology; speech by Representative Mercer, 
of Nebraska, February 13, 1896, on Free Coinage, with incidental refer- 
ence to silver in Japan. 8 pages. 

r /20) Reed on the Tariff; closing speech by Hon. Thomas B. Reed, in the 

/ House of Representatives, February 1, 1894. 23 pages. 
,, (21) Deficiency of Revenue the cause of the Financial Difficulty. Hon. John 
Sherman on Loss of Revenue under the Wilson Law, and its effect on 
the Finances of the Country; also its effect on Importation of Farm 
Products and Manufactures, January 3, 1896. 16 pages. 



tx^s 



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CONTENTS. 

(22) Blaine's Reply to Gladstone. Republication of Mr. Blaine's article in 
tlie North American Review, of 1889, on Protection. 24 pages. 

(23) Banking and Currency; a speech by Hon. James S. Sherman, of New 
York, on the Banking and Currency question, June 8, 1896. 12 pages. 

(26) Aldredge on Free Silver; speech of Judge George N. Aldredge, of Texas, 

against the Free Coinage of Silver, published in Congressional Record by 

Senator Caffery. 16 pages. 
"(28) Babcock on Money; speech of Hon. J. W. Babcock, in the House of 

Representatives, May 22, 1896, on " History of Money and Financial 

Legislation in the United States." 16 pages. 
(28) tis. Same in German. 16 pages. 
/ ytSO) Looking Forward; supplemental to Babcock's Three Evenings with Sil- 
^ ver and Money, touching the workingmen's interest in finance and 

tariff. 22 pages. 

(50) Republican Platform and Chairman Thurston's Address, St. Louis Con- 
vention, June 18, 1896. 8 pages. 

(51) Cullom on Sound Money, Honest Coinage. Speech of Hon. Shelby M. 
Cullom, of Illinois, in the Senate, June 1, 1896. 20 pages. 

(52) Blaine against Free Coinage of Silver at 16 to 1. Speech of Hon. James 
G. Blaine, of Maine, in the Senate, February 7, 1878. 16 pages. 

(53) The Wilson Bill and the Farmers. Speech of Hon. Charles H. Grosve- 
nor, of Ohio, Monday, February 17, 1896, on the Effect of the Repeal of 
the McKinley Bill upon the Farmer, with tables of imports and exports 
of farm products. 4 pages. 

(54) Silver and the Farmer; extract from the speech of Representative 
James T. McCleary, showing the price of farm products before and since 
the act of 1873. 4 pages. 

(55) Silver and the Debtor, how the free coinage of silver will affect those 
•-' in debt. McCleary. 1 page. 

(56) Bryan's Free Trade Arguments. Extracts from the speeches of the 
Democratic candidate in the House, March 16, 1892, and January 13, 
1894, in opposition to protection. 8 pages. 

(57) Senator Sherman on the Act of '73. Complete History of the Alleged 
" Crime of '73." Speech delivered in the Senate, August 30, 1893. 



Apsley on Protection 



Protection and Reciprocity 

Repeal of the Tariff Law of 1890 
Its Effect on National Revenues 



and on 



Commercial Conditions 



SPEECH 

of 

Hon. L. D. Apsley 

OF MASSACHUSETTS 
in the 

House of Representatives, Washington, D. C, 
Thursday, May 21, 1896 



'. 7 
14 

>|48 



SPEECH 



OF 



Hon. L. D. Apsley 

OF MASSACHUSETTS 
IN THE 

House of Representatives, Washington, D. C. 

Thursday, May 21, 1896 



MR. APSLEY said: 

PRESIDENTIAL HYSTERICS. 

MR. SPEAKER: — Our present Chief Executive has on several occasions 
dealt largely in literary hysterics. Among liis latest examples is his mes- 
sage of December 17, 1895, on the Venezuelan boundary question; but that 
in his message of August 7, 1893, on the repeal of the Sherman law, is still 
more extraordinary. 

All that was required in the Venezuelan matter was a simple state- 
ment of the facts then known and an intimation to Congress that he de- 
sired funds to enable him to ascertain such additional information as he 
thought necessary. All his suggestions as to war, as to resisting by every 
means within our power, as a willful aggression by Great Britain, the exer- 
cise of jurisdiction over lands which she claimed in an unknown region 
under the equator, were wholly uncalled for. It was worse than this. Such 
idle and needless threats against a friendly nation can only be properly 
designated as a political crime. Should occasion unfortunately arise, we 
trust all Americans would be united for any national interest or sentiment; 
but it is a well-known fact that those who have once fought have more con- 
servative ideas as to war than those who have delegated their fighting to 
a hireling. To add to the inconsistency of his action, on the third day 
thereafter, he sent a melodramatic message to Congress begging them to 
vote him money to relieve the nation from impending bankruptcy caused by 
the maladministration of national affairs by his own party and aggravated 
by the hysterical deliverance to which I have just alluded. 

Even these are eclipsed by the words he used in the mid-summer mes- 
sage of August 7, 1893. He had then been President for more than five 
months, President-elect for nine months, and having been President once 
before he was no groundling. He well knew, or should have known, that 
the conditions which he described so graphically were caused by the change 
in national policy foreshadowed by the election of November, 1892, when 
his party, the champion of free trade and of a tariff for revenue only, had 
been voted into power at the polls. 

THE COUNTRY UNDER PROTECTION. 

Let us look on the two industrial pictures— the one drawn by Harrison 
of the condition of affairs under the Republican policy, and that shown by 
Cleveland under the Democratic policy of free trade. 



President Harrison, fourth annual message, 1892: 

In submitting- my annual message to Congress, I have 
great satisfaction in being able to say that the general condi- 
tions affecting the commercial and industrial in- 
terests of the United States are in the highest degree 
favorable. A comparison of the existing conditions with those 
of the most favored period in the history of the country will, I 
believe, show that so high a degree of prosperity and so gen- 
eral a diffusion of the comforts of life were never before en- 
joyed by our people. 

********* 

There never has been a time in our history when work 
was so abundant or when wages were as high, whether meas- 
ured by the currency in which they are paid or by their 
power to supply the necessaries and comforts of life. 

* ******** 

WHERE ARE THESE SAVINGS NOW? 

Another indication of the general prosperity of the coun- 
try is found in the fact that the number of depositors in sav- 
ings banks increased from 69o,870 in 1860, to 4,258,89'3 in 
1890, an increase of 513 per cent., and the amount of deposits 
from $149,277,504 in 1860 to $1,524,844,506 in 1890, an increase 
of 921 per cent. In 1891 the amount of deposits in savings 
banks was $1,623,079,749. It is estimated that 90 per cent, of 
these deposits represent the savings of wage earners. 



THE PROTECTIVE SYSTEM. 

I believe that the protective system * * * j^^^g ^^.^gn a 
mighty instrument for the development of our national 
wealth and a most powerful agency in protecting the home.« 
of our workingmen from the invasion of want. 

He did not attempt to argue as to the merits of protection. That sys- 
tem, he said, had now been put into the hands of its avowed enemies, and 
the results of their action would be awaited with intense interest. While 
he warned us that the immediate results would be a decreased revenue from 
customs duties, he was yet generous enough to say that those who had 
so advocated protection and had predicted dire results from its abandon- 
ment could well afford to be disappointed in their forecasts. 

We had had, he said, in our history several experiences of the contrasted 
effects of a revenue and a protective tariff; but this generation had not felt 
them, and the lessons learned by one generation were not always accepted 
by that which followed it. He added, however, that the friends of the pro- 
tective system would await with confidence the verdict of the future. 

INCREASED MARKETS ABROAD. 

In his review he noted as the only serious question the low prices of 
vv^heat and other farm products. This condition had been due to increased 
production in other countries and to our exports being discriminated 
against. To remedy this he announced the negotiation of reciprocity agree- 
ments with Brazil, Spain for Cuba and Puerto Rico, Germany, Austria and 
various Latin-American countries. Others v/ere in course of negotiation, 
and had it not been for the change announced and determined on by the in- 
coming party, these would have soon included nearly every nation with 
whom such were advisable. 

While the treaties were just beginning to demonstrate their value he 
was even then able to show that our exports of domestic products, mostly in 
v/heat, flour, meat, and dairy products, manufactures of iron, steel and 

3 



lumber to these countries had increased $20,772,621, in this way widening 
the market of our farmers for the wheat and other products which had been 
displaced by recent extraordinary outputs in the Argentine Republic and 
Russia, and had caused such a marked decrease in the Old World prices. 
All who were interested knew then that our flour was going by carload lots 
from far interior towns to the seaports for export to Cuba, where, for the 
first time in the history of the nation, the Spanish Governm.ent had been 
obliged, because of the retaliatory clauses of the tariff of 1890, to let in our 
food products on favorable terms. We are all well aware that the Wilson 
law repealed these provisions and that as a consequence our magnificent 
new trade was stricken down, our favorable terms of importation into 
Cuba and Puerto Rico were promptly done away with by the Spanish Gov- 
ernment, and our flour and other productions had to find consumers at 
home. 

WHAT IS RECIPROCITY? 

Many Democratic authorities declare that reciprocity in trade between 
nations is, in fact, free trade, pure and simple. They forget the first con- 
dition to such treaties. There must be a tariff list from which to except 
certain articles. Without this the United States would have nothing to 
give. If all the products of a foreign country were already free, they 
would laugh at our offer to make them any freer by means of a treaty. 
Having given away our markets, our appeal would have to be made to the 
generosity, and not to the self-interest, of other nations. Lord Salisbury 
once said that free trade might be noble, but it was not business; but what- 
ever may be said of reciprocity, it is certainly business. It is fair and open 
exchange. We say to Spain, we will remove all duties upon your sugar if 
you will admit our flour free; and the American people taste the sweets of 
free sugar, the Cuban people eat untaxed bread, and the producers of flour 
and of sugar have an enlarged market. 

UNDER THE McKINLEY LAW WE HAD A TARIFF. 

The law of 1890 had been so framed that the President could negotiate 
treaties, conventions, and agreements with foreign nations to secure larger 
sale of our surplus agricultural and manufactured products, and if such 
nations would not join us in this^ effort, he could impose retaliatory duties 
on the imports from that country. 

This confronted these nations with a condition and not a theory; where 
they had to consider whether they should lose this great market entirely, 
or whether they should give us something of value in return. 

NATIONS MAKING SUCH TREATIES. 

The following is a list of the nations which entered into the special tariff 
agreements: Brazil, in effect April 1, 1891; Spain for Cuba and Puerto 
Rico, September 1, 1891; German Empire, effective February 1, 1892; Salva- 
dor, British West Indies, Nicaragua, Guatemala, Costa Rica, Honduras, 
France and her colonies, Austria-Hungary, and othei^. 

WHAT WE GAINED BY RECIPROCITY. 

With Spain (to Cuba and Puerto Rico) we gained at once at the rate 
of more than ten millions per year; with Brazil, from ten to fifteen mil- 
lions; Guatemala, nearly one and a half millions; Venezuela, one and three- 
quarter millions; Haiti, two millions three hundred and sixty thousand; 



British West Indies, 'over two and a half millions; and so on through the 
list, so that the net gain, allowing for all losses by reason of civil war and 
financial disturbances in some of these countries to the South, was for the 
year over twenty-five millions. All this and all the growth of this trade, 
which was estimated as certain to grow to more than one hundred millions, 
vras thrown away by the Democratic repeal. It did more than lose this; 
it gave our trade to these countries such a blow, because of the dishonor 
which attaches to this abrogation of a treaty, as will recLuire time to re- 
cover from. 

All the increase in these exports was in grain, corn, wheat, flour, lard, 
provisions, and the general list of manufactured articles. These people all 
want our goods, but they had to pay extra duties on them, so as to foster 
the mother country back in Europe, until the law of 1890, by the clauses 
mentioned, enabled the President to call a halt on such acts and to say to 
them: Let in our goods on fair terms, or we will tax your goods out of our 
markets. Of course, these various European countries did not love the Re- 
publican party for this action. They looked with little favor upon the party 
which had enacted a law declaring in effect that America was for Ameri- 
cans, and their great public newspapers were a unit in demanding its re- 
peal. So soon as the Republican tariff was out of the way these nations, 
Spain, France, Germany, and others, shut out our food products or discrim- 
inated against them so as to almost ruin our trade there in many lines. 
It is useless for our ministers to protest; we have deliberately thrown away 
the only lever, the only weapon, with which we could have prevented this 
action, and we now have to pay, in the great loss in our export trade, the 
cost of Democratic incompetence and hostility to the interests of labor and 
agriculture in the United States. 

PRESIDENT CLEVELAND'5 MESSAGE OF 1893. 

The evil results of the change in national policy which was to be in- 
augurated by the Democratic party began to show themselves with the first 
days of the year 1893. By the time the new President was installed this 
had become so threatening that Cleveland was censured by many for not 
at once convening Congress. Perhaps he was afraid of the newly elected 
Representatives. At any rate, he neglected to avail himself of their 
counsel and assistance until the industries of the country were in a state of 
complete prostration. No such spectacle had ever before saddened the 
American people; their honest workmen were idle in hundi.'eds of thousands; 
anarchists and "Coxeyites" held high revel, and all the world looked on 
in surprise at the awfulness of the disaster which had so suddenly come 
upon us. 

After waiting five long months he finally called Congress in special ses- 
sion. On the 8th of August he addressed them a message, which stands, 
and I trust may ever stand, separate and apart among the utterances of 
our Presidents — an abject confession of incapacity and a blind accusation 
of all existing conditions on the party and policy which had ever been suc- 
cessful in preventing such conditions from arising. 

The existence of an alarming and extraordinary business 
situation, involving the welfare and prosperity of all our peo- 
ple, has constrained me to call together in extra session the 
people's representatives in Congress, to the end that, through 
a wise and patriotic exercise of the legislative duty with which 
they solely are charged, present evils may be mitigated and 
dangers threatening the future may be averted. 

Any man who could expect a wise and patriotic exercise of the legisla- 
tive duty from that body would be appropriately lodged not in the White 



House, but in an asylum for those of feeble mind. In a trusting- mood he 
continues: 

Our unfortunate financial plight is not the lesult of unto- 
ward events nor of conditions related to our natural re- 
sources; nor is it traceable to any of the afflictions which fre- 
quently check national growth and prosperity. With plenteous 
crops, with abundant promise ^f remunerative production and 
manufacture, with unusual invitation to safe investment and 
with satisfactory assurance to business enterprise, suddenly 
financial distrust and fear have sprung up on every side. 
Numerous moneyed institutions have suspended because 
abundant assets were not immediately available to meet the 
demands of frightened depositors. Surviving corporations and 
individuals are content to keep in hand the money they are 
usually anxious to loan, and those engaged in legitimate busi- 
ness are surprised to find that the securities they offer for 
loans, though heretofore satisfactory, are no longer accepted. 
Values supposed to be fixed are fast becoming conjectural] 
and loss and failure have invaded every branch of business. 

HE STATED CONDITIONS CORRECTLY. 

All the facts he states above were true, too true, as we are all aware. 
And what a contrast to the times left by the preceding Administration, 
and which were correctly portrayed in the message of President Harrison 
sent to Congress only eight months before. National and individual pros- 
perity on the one hand; national and individual poverty on the other. 

HE ASKS THE REPEAL OF THE SHERMAN LAW. 

He had waited five months to find some other excuse for the awful 
ruin in view, to find some other cause to allege than the plain and well- 
known one of impending free trade. At last he chose his "Bogy," the 
thing with which to cover with obloquy; on which he might safely vent 
his spite. With a Treasury bankrupt because importers chose to wait for 
the promised free trade, he found the sole and only cause was the so- 
called Sherman law. Here is what he said of this: 

I believe these things are principally chargeable to Con- 
gressional legislation touching the purchase and coinage of sil- 
ver by the General Government 

This legislation is embodied in a statute passed on the 14th 
day of July, 1890, which was the culmination of much agita- 
tion on the subject involved, and which may be considered a 
truce, aftei- a long struggle, between the advocates of free sil- 
ver coinag-e and those intending to be more conservative. 

If the principal cause be removed the evil must needs soon pass 
&,way. Has this happened? 

THE SHERMAN LAW IS REPEALED. 

We of the United States have now endured existence nearly three 
years since this awful law was repealed, and have we grown sleeker and 
fatter since? Has the steady decline in every branch of legitimate in- 
dustry ceased for a day, or have we found our resources ever growing 
less day by day? Did this country, so prosperous in 1S92 in spite of this 
Sherman law, regain even that prosperity after its repeal in 1893? Let 
the undeniable business conditions answer; let the people of this country 
answer, waiting, as they have been, for the time to pass and counting the 
months and days until they should have an opportunitj' to express their 
opinions on the conduct of affairs and to return to the policy of protec- 
tion, under which this country has ever had its widest and safest pros- 
perity. 



The Democratic party repealed the Sherman law; the purchase of sil- 
ver bullion stopped for once and all. And what have been the results? 
Not even the bullion in the Treasury or the seigniorage oi- profits oil the 
coinage of silver can be used, while we have pledged the future to pay for 
current expenses to the extent of $260,000,000, against a saving of $250,- 
00<J,000 in the public debt by the last Republican Administration. 

Has business improved? Are all financial distrust and fear passed 
away? Not exactly! If not, then it must have been a false alarm of 
President Cleveland; an incorrect diagnosis of the national ills. Or was 
it not in fact caused by the threat of the tariff reduction, a threat made 
good by the passage of the "Wilson-Gorman" bill, a measure so corrupt 
and ill designed that the President himself was compelled to let it become 
a law without his signature? 

The Sherman law had done but little harm under the Republican con- 
ditions of a solvent Treasury and an increased export trade to foreign 
countries; but the reduced revenues caused by the impending reduction of 
the tariff brought about incipient national bankruptcy, a condition which 
Democratic blindness charged entirely to the Sherman law. 

THEY PUT THEIR HEADS IN AMBUSH. 

After four months of wrestling, the Democratic party, in November. 
1893, finally repealed this awful law, and, thinking the country was now 
saved from Republican wickedness, took a few weeks' rest before giving 
us the "simon pure" free trade which they had promised the country. With 
their heads safely hidden, ostrich-like, in the bushes, they could not 
sense the terrible storm of ruin then sweeping the country. They had 
done their duty, and if the people did not know when they were saved it 
was no fault of the party. Indeed, many of them charged that merchants 
were deliberately throwing away their money, sacrificing their whole for- 
tunes, just to say so to the Democrats. The American people were to 
their eyes like the obstinate and opinionated patient who insisted on dy- 
ing when the doctor declared he had given the proper remedies, that he 
must get well, that all the Democratic doctor books said that was the 
proper treatment, and that he did not treat the physician rightly by in- 
sisting on going off when in fact all theories said he should get on and 
recover. 

THE WILSON=GORMAN BILL. 

Now, with clea,r decks, with President and Senate and House, all the 
machinery of the Government, in their hands for the first time since poor, 
old pottering Buchanan was their pofitical idol, they fell to with shouts 
of glee to execute their long-cherished desires. The chief manufacturing 
and agricultural industries of these now unfortunate United States lie, for 
the most part, to the north of the Ohio; and it would have seemed only 
the part of ordinary prudence to let the representatives of these States 
have a chief hand in the pulling down of the columns of the building. But 
no, this mighty work was intrusted in the House to a college professor 
from West Virginia, to distinguished ex-Confederates from Georgia and 
Tennessee. From the House this bill, halting and lame on its new theo- 
retical lines, strong only in the ruin it wrought, went to the Senate to be 
developed by other Southern Statesmen— JONES of Arkansas. MILLS of 
Texas, and VEST of Missouri— with BRICE of New York and Ohio, and 
GORMAN of Maryland assistants for the rescue of trusts and special 
interests. We all know that this bill, with GOO amendments, returned to 



the House, where the esteemed college professor swallowed them all at 
one gulp and then fled to far-away Mexico to try to forget what his party 
had forced him to do, while the Chief Executive reluctantly let it become 
a law without his signature. 

AFTER THIS THE DELUGE. 

What has transpired since the passage of this monstrous bill is a part 
of the bitterest history of the country. That there should be hard times 
during or after a great civil war is a thing to be excused, to be expected. 
But to have ruin heretofore unknown and unparalleled in extent and dura- 
tion come in a period of profound peace, to have our national credit at so 
low an ebb that the Government was compelled to appeal to the money 
changers of Europe for rescue, to burden the energies and lives of an- 
other generation with the immense burden of a debt of $260,000,000 in less 
than three years, where, under the wise policy of the preceding Adminis- 
tration, this debt had been reduced $250,000,000 without being felt by the 
people: this mere recital would seem enough to damn such a party and such 
a policy to another period of thirty years outside the breastworks. But 
this does not begin the recital, of the wrong done or the ruin caused by 
this suicidal policy of the Democratic party. 

IN HANDS OF RECEIVERS. 

Heretofore, these United States, in peace and in war, through evil re- 
port and good report, had been for thirty years managed as a great and 
solvent corporation. Since March, 1893, it has been in the hands of an 
incompetent receiver. He has begged and borrowed money for current 
expenses when all that was needed was to take advantage of the plain 
resources of the country and make it self-supporting and helpful to all 
the people. With the Government in such a condition it is idle to expect 
any marked or permanent improvement in the general business of the coun- 
try. Under the last Republican- Administration we had an ample Treasury 
supply, we decreased the debt almost as much as this one has increased it, 
and the magic breath of life and public credit was throughout all. With 
similar conditions the now serious problems of silver and sufficient money 
for the exchanges for the needs of the country will all solve themselves 
in natural and orderly sequence. It has been shown to be idle to expect 
such wise and patriotic action from the party now in power. 

FREE TRADE THE TRUE CAUSE. 

When one fatal and strong-rooted disease gets hold of a sick man it 
follows, as a matter of course, that symptoms of many other minor dis- 
eases come to the front. It is not, however, the policy of the wise physi- 
cian to turn all his attention to these, but rather to reach the seat of the 
main difficulty and expect the removal of the main cause to bring about 
the amelioration or disappearance of the minor ones. Thus with a safe, 
protective tariff— one framed to secure a just degree of protection to the 
labor of the farm and the workshop, and the capital which nourishes and 
keeps these all in successful operation — we will once more be on the high- 
way of national prosperity. With this we will have ample provisions for a 
wider market abroad for the rapidly growing surplus of our agricultural 
and manufactured products under the wise system of reciprocal treaties 
inaugurated by Harrison and Blaine and so contemptuously repealed by 
the "Wilson-Gorman" law. 



'Three Evenings witli Silver and Money." 



A TALK OF FOUR NEIGHBORS 



ABOUT 



MONEY and SILVER. 



FROM THE REMARKS OF 

HON. JOS. W. BABCOCK, 

OF WISCONSIN, 

In the House of Representatives, 
WASHINGTON, D. C. 

June 8, 1896. 



REMARKS 



OF 



Hon. JOS. W. BABCOCK, 

OF WISCONSIN, 

In the House of Representatives, Washington, D. C. 

IS/Lonclay, Juine S, 1S9Q. 



Mr. BABCOCK. Mr. Speaker, under the leave which has been granted by 
the House I desire to make some practical observations on silver and money, 
and especially on the proposition that the United States should open its mints 
to the gratuitous and unlimited coinage of silver at the rate of 16 to 1. 

And in doing this I can best express my views in a simple and easily under- 
stood manner by adopting as my own a conversation on the subject on three 
evenings between Mr. Smith, a practical business man and careful student of 
finance; Mr. Jones, an intelligent farmer; Mr. Vance, formerly a Greenbacker, 
now a Populist and silver man, and Mr. Burns, a common-sense laborer, 

THREE EVENINGS WITH SILVER AND MONEY— A TALK OF 
FOUR NEIGHBORS ABOUT SILVER AND MONEY. 

FIRST EVENING. 

These four neighbors chanced to meet one^ evening at the house of one ol 
their number. As these are times when all good citizens are thinking, studying 
and debating this c^estion, they naturally began talking about it. 

Mr. Jones opened the conversation by remarking that he had been reading 
one of the numerous pamphlets written and distributed by an association sup- 
ported by silver-mine owners, which seeks to have the United States, by itself 
and alone among the commercial nations of the world, open its mints to the 
free and unlimited coinage of silver at a ratio of 16 to 1, and he asked Mr. 
Smith to give his ideas of the proposition. 

Mr. Smith. Well, we have an evening before us; and as I have had con- 
siderable experience in business affairs, and have given a good deal of study to 
money problems and am interested in them, I always like to talk with intelligent, 
practical men on. these subjects, and I find that their experience helps me to 
a better understanding of such questions. The subject is too big a one to 
cover in one evening. But I would be willing to come here several evenings 
until we have gone over the whole subject. 

Mr. Jones, Mr. Vance and Mr. Burns (speaking at the same time). That 
is very kind of you, Mr. Smith; we want to be sure that we have the right un- 
derstanding of this money questipn. 



THE NATURE AND USES OF MONEY. 

Mr. Smith. Now, the first thing we need to do is to obtain a clear idea 
of what money is, and what are its uses in modern business, that we may be 
better able to understand the points at issue. Of course we all know that 
money is the standard or measure of the values of all products, the financial 
yardstick, so to speak, and also the tool of exchange, by which I mean it is a sub- 
stance which, by common consent, is accepted by everybody as equivalent in 
value to that which is sold. Before this common medium of exchange was 
adopted the primitive world had to resort exclusively to barter, or a direct 
exchange of one product for another. This was a very bungling, unsatisfactory 
method of making exchanges. For instance, "A" had a certain article which 
he did not need. He had to hunt up some one else— B, for instance — who did 
not have what A had in surplus and did have what A was short of. 

Mr. Jones. Oh, yes; I remember reading that in very early times this 
common medium of exchange which we call money was oxen, and in the early 
Roman period it was sheep; still later iron; then silver, first weighed out to the 
purchaser and subsequently coined; and then gold. I have read that the 
precious metals when used as money were not coined at first, but weighed 
in each transaction. I remember the account in the Bible of Abraham's pur- 
chase of a burial ground with a certain weight of silver. On account of the 
trouble of weighing and dividing the silver or gold in each transaction, con- 
venience naturally suggested that the government of each country should divide 
the silver or gold bullion into pieces of different weights and stamp one fixed 
designation upon the various pieces of the same weight, and another desig- 
Qation upon the pieces of another weight, which would in effect be a certifi- 
cate of the weight of each that could be relied upon as accurate. This is 
what coinage practically is. 

Mr. Smith. That is true. And you will notice that as any people 
have advanced in civilization the article selected by common consent as this 
common medium (for law simply recognizes what common consent has already 
adopted) has been less and less bulky and clumsy. China and India find silver 
alone adapted to their conditions. Every modern first-class commercial nation 
can not successfully do its business without gold for the larger 'transactions and 
for the settlement of foreign balances, as well as for reserves. But in all times 
property money — that is, money of intrinsic value and therefore money of 
final redemption — has been some product which possessed value aside from its 
use as money, because no one who had a valuable product would exchange it 
for anything else unless it had an equivalent value. 

THE FIAT IDEA OF MONEY. 

Mr. Vance. This is where you and we Greenbackers, or Populists, 
differ. I am willing to sell my labor or any other valuable thing I may have 
for a bit of almost valueless paper called a greenback, on which is printed the 
stamp of the Government, with the figures $1, $2, $5, etc., or for a piece of 
paper issued by a national bank with similar figures, or for a similar bit of 
paper called a silver certificate. Doesn't this show that whatever the law de- 
clares to be money is money, and that nothing can be money which is not thus 
made by the fiat of the law? 

Mr. Smith. You must remember, Mr. Vance, that the bit of 
paper called a greenback, which we call credit money, is a promise of the Gov- 
ernment to pay the gold or silver coins which we call property money; and the 
bit of bank paper is a similar promise of the bank which issues it. The silver 
certificate or the gold certificate is simply a receipt of the Government showing 
that the number of silver or gold dollars which it calls for has been deposited 
in the Treasury, and may be drawn from the Treasury any day that the 



holder of the certificate desires the deposited coin. All of these pieces of paper 
are used instead of the coin which tliey represent, for convenience. 

During the war of the rebellion we had only paper credit money, which, 
although declared by law to be dollars, was more or less depreciated below the 
coin which it purported to represent — the depreciation depending upon the degree 
of distrust which prevailed at any time as to whether the paper promises 
would be redeemed in coin or property money. In 1879, when the Govern- 
ment had provided a fund of coin to pay its paper promises as presented, and 
had announced its purpose to do so, armed as the Treasury was with authority 
to borrow, confidence was restored, and the notes of the Government were ev- 
erywhere regarded as equivalent to coin and therefore at par. 

Property money, that is coin containing the full value of bullion indicated 
"by the stamp (and all coin that has the privilege of free and unlimited coinage 
must be of this character), does not need redemption nor the legal-tender power 
conferred by law to give it currency at its face value for the reason that it has the 
same value as bullion before coinage as after. All that the legal-tender quality 
can confer is simply the power of discharging debts; but as every new debt 
will be contracted on a basis of the real value of the money on which it is 
to be discharged this really adds nothing to its value. A dollar note i^.-ued by 
a bank which does not have the legal-tender quality is of the same value of a 
greenback dollar with a legal-tender quality. 

A FIAT IDEA IN COINAGE. 

Mr, Vance. How does it happen, then, that our silver dollar, which you 
sometimes call a 50-cent dollar when the market value of silver bullion in it 
is only 50 cents, is just as good in making purchases as a gold dollar, whose 
bullion is worth 100 cents in the market? 

Mr, Smith. That is because the Government coins the silver dollar on 
its own account and for its own profit, and does not allow private owners of 
bullion to have their bullion coined for their own profit. By limiting the coin- 
age and underjaking indirect redemption of this limited quantity, by receiving 
them for gold, duties or for taxes, tho Government, as to the 50 cents in ex- 
cess of the intrinsic value of the slandn.rd silver dollar, maintains them at par 
with gold precisely as it maintains greenback dollars at par. 

In other words, the silver dollar is maintained at par by its practical re- 
demption by the Government, just as our fractional silver coins are maintained, 
as neither has the intrinsic value which the stamp indicates. France main- 
tains her silver at par with gold in the same way. 

Mr. Vance. But is not money a creature of the law, and cannot the Govern- 
ment make anything a dollar that it chooses to? 

When Mr. Cheek gave his lecture on money before our club I remember 
that we all cheered and clapped wiien he raised his arm and stamped his 
right foot and declared that law made money and if the people would only 
have the right lawmakers we could drive the "goldbugs" to the wall. 

Mr. Smith. You must bear in mind that while the Government can declare 
anything to be money that it pleases, yet it cannot create the value in the 
money. That must be in the substance declared to be money if it is property 
money; or, if it is credit money, a redeemable promise to pay property money. 
The Government can, declare a clam shell to be money; may declare every shell 
a dollar, but the purchasing power or value of the dollar will practically be 
what clam shells are worth, unless the Government, by direct or indirect re- 
demption, undertakes to add to its value. 

The name dollar given by law to our motnl unit of value may be given to 
anything, but the value of the thing called a dollar, aside from redemption, 
depends upon the value of the quantity of the substance of which it is made 
plus the charge for coinage. 



Tlie la-vr, under free coinage, may call 25.8 grains of standard gold (the 
weight of a gold dollar), of 412l^ grains of standard silver (tlie weight 
of a silver dollar), or half that weight, a dollar, but the piece called a dollar 
(when it» value is not maintained by redemption) will be of the value of the 
substance of which it is made. 

Mr. Jones. If the idea is that the "fiat" of the law or the stamp of the 
mint creates value — making whatever is declared or stamped as money just 
the value indicated by the stamp — were true, it seems to me it would be use- 
less to have valuable gold or silver for money when it would do just as well 
for this valuable stamp to be put on an Almost valueless piece of paper. 

Mr. Smith. You are right. If the Government can make 50 centa' worth ol 
silver bullion worth 100 cents by stamping "one dollar" upon it without re- 
demption, then it would be wrong to do this for private owners of silver bullion 
without charging them an equivalent for the value added to their property by 
the Government stamp. With such a stamp as this— more wonderful than Alad- 
din's lamp — the Government would have plenty of revenue without resorting tc 
taxation, and would make everybody rich. All of the schemes for depreciating 
the currency to give relief iu times of business depression are outgrowths of 
the "fiat" idea of money. 

THE RATIO OF COINAGE. 

Mr. Vance. Am I to infer from what you have said that when the Govern- 
ment grants free and unlimited coinage to both silver and gold it cannot fix 
the coinage ratio between the two? 

Mr. Smith. The Government, of course, can fix this ratio by law as it pleases, 
but unless that ratio is approximately the bullion ratio of the two metals, then 
the metal which is undervalued by the ratio will not be taken to the mint for 
coinage, an<l will be withdrawn from use as money and sold as merchandise, 
for the reason that it would be worth more as a commodity than as money. 

The only metal which would be taken to the mint for coinage would be 
that overvalued by the ratio, in accordance with the well-known monetary law 
that where two or more different kinds of legal-tender dollars are authorized 
only the cheaper dollar will be coined and used. If the cheapest dollar authorized 
is a depreciated paper dollar (as was the case in this country from 1861 to 1879), 
then neither silver nor gold will be taken to the mint, and the only dollar need 
will be the cheapest paper dollar, which will become the practical standard of 
value, no matter what the law declares to be the unit, 

Mr. Burns. When you say the piece of coined money called a "dollar" 
can be worth only what the bullion in it is worth under free coinage, you mean 
that its purchasing power will only be that. 

Mr. Smith. That is just what I mean. When the dollar which is paid the 
laborer for his day's work is depreciated, the laborer who thinks he is receiv- 
ing a "dollar" for his labor really receives as much less as the purchasing 
power of his money may be. And as prices of what the laborer has to buy 
always rise faster than the price of his labor, he is the man who is always first 
cheated by a depreciated dollar. 

iMr. Burns. I know that is so by experience. I very well know that the 
workingman always gets the most for his labor when the money is of the best 
quality — every dollar as good as gold. I remember when the greenback was de- 
preciated, and I thought I was getting $3 per day, that it took more days* 
labor to buy anything than it did in 1892, and I do not propose to be drawn 
into any scheme to make the laborer's dollars poorer than the bankers. 

Mr. Jones. Then it seems to me that the practical standard or measure of 
value in any country where there are two or more kinds of full legal-tender 
dollars authorized by law will always b« the least valuable dollar, provided they 
are of different values— no matter whr*t the law declares to be a unit or 
standard- * 



^rr. Smith. Thnt is so. Bptwoen 1792 and 1834, 371^4 grains of pure sitvet 
(412Vo j^rains standard silver), and also 24% grains of pnre (25.8 grains of 
standard) gold were each a legal dollar or unit (a quarter eagle being the small- 
est gold coin minted), but as that quantity of gold bullion was worth a little 
more than the silver in a silver dollar, the silver dollar was the practical stand- 
ard. 

From 1834 to 1861 a gold dollar of 25.8 grains (standard) was the prac- 
tical standard, for the reason that the gold in a dollar cost less than the silver 
in a silver dollar, and the cheaper full legal-tender dollar will always take the 
field— the whole field— where there is considerable difference in the value of the 
two full legal-tender dollars. 

From 18G1 to 1873 the depreciated greenback dollar was the practical stand- 
ard of value, notwithstanding the silver dollar was also a legal unit or dollar, 
because the greenback dollar was the least valuable. 

In 1878 the gold dollar was made the legal unit, but the practical standard 
continued to be the depreciated greenback dollar until the resumption of specie 
payments in 1879, when the gold dollar again became the practical standard, 
as it was from 1834 to 18G1, and also the legal standard. 

THE COINAGE RATIO OF THE FATHERS. 

Mr. Vance. Well, the "fathers" did maintain the ratio of 16 to 1, and se- 
cured both silver and gold until silver was remonetized in 1873, and I believe the 
moment we now demonetize silver we shall find that 16 ounces of silver will be 
worth everywhere as much as 1 ounce of gold, as they were once. 

Mr. Jones. I thought we did not have the ratio of 16 to 1 till 1834. 

Mr. Vance. Oh, yes; the "fathers" in 1792 fixed the •ratio at 16 to 1, and 
we were all right, and should have continued all right if it had not been for 
"the crime of 1873." 

Mr. Smith. You are mistaken in saying that the "fathers" adopted the ra- 
tio of 16 to 1, unless you mean the "fathers" of 1834. The "fathers" who lived 
at the discovery of America found 11 ounces of silver equal in value to 1 of 
gold. The "fathers" of 1792 paid no attention to what their "fathers" of 1493 
did, strange as it may seem to our "fiat" brethren, but proceeded to establish a 
coinage ratio of 15 to 1 (not 16 to 1), because they estimated that 15 ounces of 
silver were equal in value, on the average, to 1 ounce of gold. Subsequently 
it was found they had made a slight mistake in estimating the bullion ratio of 
silver and gold — only 2 per cent. — which very largely kept gold from the mints; 
and so the later "fathers," in 1834, changed the ratio to 16 to 1 (to be exact, 
15.98 to 1), and even then a slight undervaluation of silver and overvaluation 
of gold to the. extent of only 2 per cent, by this ratio, resulted in the taking of 
very little silver to the mints between 1834 and 18G1. ^ 

' You will see that the object in fixing and changing the coinage ratio was 
to keep that ratio as near as possible to the bullion ratio in order to retain both 
metals as money, and that the ratio of " 6 to 1 was not adopted until 1834. and 
was continued practically only twentj seven years, as neither gold nor silver 
was coined to any extent from 1861 to 1873. The ratio of 16 to 1 was not 
a fixture. It was simply a temporary adjustment of the coinage ratio to the 
market ratio of gold and silver bullion in 1834, just as 15 to 1 was an adjust- 
ment to the market ratio of 1792 and 11 to 1 an adjustment to the market 
ratio of 1403. 

Mr. Vance. But if the ratio of 16 to 1 worked from 1834 to 1861, why 
won't it work now? 

Mr. Smith. Because the relative conditions of gold and silver production and 
use have greatly changed, and silver, which was then worth ^l.'SO per ounce, 
i& now worth only half that price. Silver bullion must be worth at least $1.29 



8 

per ounce in order to maintain the ratio of 16 to 1 and hold both metals in 
our coinage. Silver has declined partly because all Europe has clewed itb mints 
to its free coinage, but chiefly for the same reason that cotton cloth, steel, ker- 
osene oil and other things have declined — it can be produced more cheaply than 
formerly. Forty years ago 3 yards of cotton cloth were equal in value to one 
bushel of corn in Illinois. Now a bushel of corn will buy eight yards of cotton 
cloth, because it can be made at less cost. It would be just as sensible for the 
manufacturers of cotton cloth to demand that the ratio between cloth and corn 
should now be 3 to 1 because that was the ratio forty years ago as it is for the 
silver mine-owners to demand that 16 ounces of silver shall be regarded now 
in coinage as equal in value to one ounce of gold because that was the ratio 
twenty-odd years ago. 

Mr. Jones. I cannot see why silver bullion should not decline as well as 
other products, provided the discovery of richer mines and cheaper processes 
of separating the ore has reduced the cost of production. I was reading from 
a silver pamphlet a few days ago a complaint that silver is denied the privi- 
leges accorded to gold; but, as I understand it, the silver-mine owners resent 
the suggestion that silver should be coined at its bullion value, as gold is. 

'Mr. Smith. That is the fact. They talk about the restoration of silver to 
its old position, by which they mean not its coinage at its bullion market 
ratio, as it formerly was, but a ratio that assigns twice the bullion value to 
silver that it has in the market. 

WHAT HAS CAUSED THE DECLINE OF SILVER. 

Mr. Vance. But the silver-mine owners claim that it costs as much to 
produce silver as it ever did— far more than it has sold for since 1880— and 
that it is adverse legislation closing the mints to the free coinage of silver 
which has caused silver to decline. 

Mr. Smith. The simple and conclusive answer to the claim that it costs 
as much to produce silver as ever, and more than it has sold for since 1880, 
is that it is not possible to have any article produced in increasing quantities 
year by year for fifteen years — four times as much as was produced in 1865 
— when its selling price is uniformly less than its average cost, and it is absurd 
to contend otherwise. Whenver year after year enough persons stand ready 
to produce all the world wants of an article for 75 cents or 85 cents per ounce, 
that must be accepted as the market value with which we have to deal. 

Undoubtedly the general closing of the mints of Europe to the free coin- 
age of silver, by diminishing what would have been the demand if they had 
been open, has carried the price of silver some lower than it would have other- 
wise gone. But, however much this action of Europe may have affected sil- 
ver, there is no way of ovsrcoming it except by inducing these European coun- 
tries to unite with us in international action. Even if it were true, as the sil- 
ver extremists claim, that all the fall in silver as compared with gold has 
been caused by the closing of mints' to the free coinage of silver, this would nol 
justify the opening of our mints ?lone at the ratio proposed, because it is the 
effect of European adverse legislation (not legislation here) with which we must 
deal. 

Our legislation in 1873, striking the standard silver dollar from the list of 
coins to be minted, could not have had any influence in lowering the price of 
silver, because we had not coined silver to any extent for twelve years prior to 
1873; while, on the other hand, we began in 1875 to coin subsidiary silver, and 
in 1878 resumed the coinage of the standard silver dollar, using five times as 
much silver as money in the twenty years from 1875 to 1895 as we used in 
the eighty-one years from 1792 to 1S73. 

Mr. Vance. Do you not think the legislation of 1873 was instigated by 
'foreign holders oi our securities to increase the value of their debts? 



Mr. Smith. Nonsense! When the legislation of 1873 was had the gold in 
the gold dollar \ya9 3 cents cheaper tlmn the silver in the silver dollar; and if 
any one had had in mind the idea of increasing the value of debts by 
manipulating the coinage he would have proposed to drop ,the coin- 
age of gold, so as to have only the more valuable silver dollar. The legislation 
of 1S73 was the very natural adaptation of our coinage to the condition which 
had existed from 1861, during which tijne silver had been worth more than 
gold and had disappeared from the country, and was regarded of so little con- 
sequence that it attracted no attention. Undoubtedly if there had been no such 
legislation in 1873 we should have been obliged to have followed the action of 
France, which stopped the free coinage of the standard silver dollar in 1875. 

But to return to the causes of the decline of silver. After making all due 
allowance for the effect of the closing of European mints in depressing silver — 
the remedy for which is to be found only in international bimetallism — the 
chief cause of the decline of silver lies in the abnormal increase of productioii 
of silver in the face of a declining price. 

INCREASE OF PRODUCTION OF SILVER. 

Mr. Vance, I have heard a great deal about an alleged increase of pro- 
duction of silver since 1873; but I have here a statement of the secretary of 
a Western silver league, who has published a book called "Coin," in reply to 
a remark of Senator Sherman that this increase of production is the chief 
cause for this fall, which I will read: 

"You will find by examining the table of silver production that,, while dur- 
ing the first fifty years of this century the world produced 78 per cent, more 
silver (coining value) than gold, during the last twenty-one years (1873 to 1S92) 
the production of silver (coining value) over gold has been less than' 5 per cent." 

This is an emphatic declaration that seems to show from official figures 
that proportionately more silver^ was produced before 1873 than in the twenty- 
one years after 1S73. 

Mr. Smith. I have official figures of gold and silver production for ten-year 
periods from 1800 to 1850 and five-year periods from 1850 to 1875, and from 
1875 to 1895, both for the average annual production and the total production 
for each period, and, omitting the odd numbers and giving simply the round 
millions, they are as follows: 



Average Annual and Aggregate Ten or Five Years' Gold and Silver Production. 



Period. 


Annual. 


Total. 

In Millions of 

Dollars. 




Gold. 


Filver. 


Gold. 


Silver. 


1800-1^10 


Si 

H6V4 

132>| 
134 
123 
12'..i^ 
11514 
1141 2 
99 
112 
loO 


3714 
22K 
19 

si 

'4 

55)1 
8l|| 

101^1 

iiy 

150 
2j0 


118 
76 

615 

648 

577 

573 

4951^ 

555 

753 


371"'^ 


181 1-18 (1 . 


191 


1821-1.^30 


1831-l84'i 


248 


1811-1850 


394 


1851-1$5') 


184 


1856-1860 


188 


1861-lf-6'i . . . 


''28 


1866-1870 


2781^ 
409 


1871-1875 


1876-18S0.. 


5(0 


1881 18S5 .. 


?94% 


188B 1>")0 


1891-1895 


10U4 







, (After examining this statement of Coin, Smith continues:) 
Now, this silver publication conveys the impression that those figures proTe 
that Senator Sherman's statement, that the production of silver has pro^or- 



10 

tionately increased in the twenty-one years from 1873 to 1892, inclusive, beyond 
the production of a similar period before 1873, is the reverse of the fact. You 
so understand it, do you not? 

Mr, Vance. Of course that is what everybody would suppose to be its as- 
sertion. 

Mr. Smith. That, of course, is the impression that the general trend of the 
pamphlet's reply to Senator Sherman was intended to convey. But the cunning 
fellow who wrote it is careful to so phrase his reply as not to directly assert 
it, but to leave it implied. After much loose talk he finally ventures to be 
specific in the paragraph you have read. . You and others seem, to have swal- 
lowed this summary of official figures as a conclusive reply to the Senator, thus 
showing how easy it is to deceive in monetary discussions. 

Senator Sherman's statement was that the production of silver in proportion 
to that of gold increased in the years between 1873 and 1892 beyond what it 
was in the twenty-one years preceding. Coin replies that this is the reverse 
of the fact, and then proceeds to compare the production, not with twenty- 
one years before that date — as candor, not to say honesty, in the use of sta- 
tistics demands— but with the fifty years from 1800 to 1850, omitting entirely the 
twenty-one years immediately before 1873. 

Mr. Burns. Is that so? I should be afraid to put the slightest confidence 
in a man who would attempt to mislead in that way. 

Mr. Smith. Well, here is the book; read for yourself and see if that is 
not exactly what he has done. And this is a specimen of the misleading treat- 
ment of the subject all the way through. 

A HIATUS OMITTED BY "COIN/' 

Mr. Burns (after reading). It is as you say, although, as I read the page 
hurriedly, I did not notice the trick. Now, won't you add up the figures and 
give US the total production of gold and of silver twenty-one years after 1873 
and twenty-one years before, giving the coinage value of each, as this pam- 
phlet does? 

Mr. Smith. That is what I have done, and here are the totals for each 
period. The production of gold twenty-one years before 1873 was $2,510,575,- 
000, and of silver (coining value) $989,265,000, or 150 per cent, more of gold 
than silver. Production of gold twenty-one years after 1873 was $2,157,197,000 
and of silver $2,246,519,000, or 5 per cent, more of silver than gold. 

~ In other words, while the production of gold was a little less between 1873 
and 1892 (inclusive) than it was between 1852 and 1873, the production of sil- 
ver in the twenty-one years since 1873 has been 125 per cent, more than in the 
twenty-one years before. Yet in the face of this obvious fact, told by the very 
tables that he refers to, this 16-to-l silver advocate so manipulates figures by 
omitting entirely the "twenty-one" years before 1873 as to seem to show other- 
wise. 

Mr. Vance (after examining the figures). I must confess that I was mis- 
led by the statement I read. Yet it seems that between 1800 and 1840 silver 
production was even larger in proportion to gold production than between 187o 
and 1892. 

Mr. Smith. You must bear in mind that no intelligent comparison can be 
made 'of monetary demands and conditions from 1800 to 1840 with the strik- 
ingly changed conditions of the last twenty-five years. In the first forty years 
of this century silver constituted the chief money of Europe and other countries; 
but in the last forty years, in consequence of the immensely larger transactions, 
the use of gold has proportionately increased and that of silver has increased 
much less. 'This tendency caantt be ekaaged by l«gislati«n, aad it is a factor 
that must be reckoned with. 



11 

It is for thli reaffOQ that it is absurd to go baek to tlie silver praduction of 
1800 for figures to compare with silver production since 1873, especially when 
the figures from 1851 to 1873 are before ue. 

Mr. Jones. What has been the silver production (coinage value) of the 
world in the past five years as compared with that of the five years before 
1870? 

Mr. Smith. The silver production from 1865 to 1870 was, in round numbers, 
two hundred and seventy-eight millions and the gold production six hundred 
and forty-eight millions, while from 1890 to 1895 the silver production was one 
thousand and four millions (almost four times what it was in the first period) 
and the gold pir*duction seven hundred and fifty-three millions. A simple 
statement of these figures, bearing in mind that between 1865 and 1870 silver 
was worth nearly $1.35 per ounce, while betwen 1890 and 1895 it was worth 
considerably less than $1 per ounce, ought to convince the most prejudiced not 
only that there has been an abnormal increase of silver, but also that the cost 
of production must have largely declined, entirely outside of the influence of 
the closing of European mints to free coinage of silver. 

Mr. Vance. I must confess that this increase of production of silver, under 
the circumstances, does seem to indicate that the discovery of richer mines 
and new and more economical processes has cheapened silver somewhat; but 
has not the reduction of demand for silver, caused by closing the mints to free 
coinage of silver, had a still greater influence in depressing it? 

Mr. Smith. As I have already said, both causes have had their influence; 
and it is impossible to tell how much is to be ascribed to one cause and how 
much to the other, although the great increase of production of silver in the face 
of a constantly falling price indicates that the reduction of cost of production 
must have been the more important factor. 

THE MONEY OF THE WORLD. 

There is an impression that because the European mints no longer give fret- 
coinage to silver, therefore silver is not used much as money. But, as a mat- 
ter of fact, Europe still uses an immense quantity of silver as money. Indeed, 
there is about the same amount of silver as gold used to-day by the whole world 
as money — about four thousand millions of each, all of which but four hundred 
millions is full legal tender. 

Of this silver one thousand eight hundred and fifteen millions are in India, 
China, and other Eastern countries that use only silver, leaving about one thou- 
sand six hundred millions of full legal-tender silver, with six hundred millions 
of limited tender silver, and four thousand millions of gold, with two thousand 
five hundred and thirty-three millions of uncovered credit money for the rest of 
the world. 

The gold and silver and credit paper money of the leading commercial na- 
tions, all of which have a gold standard, is thus stated by the Director of the 
Mint: 



Uniled States 

France 

United Kingdom 

Germany ^ 

Belgium 

Norway and Sweden 

Denmark 

Austria , , 

Total 



Gold. 



$626,600,000 
825,000.000 
550,000,000 
625,000,000 
65,000,000 
13,800,000 
14,200,000 
130,000,000 



$2,839,600,000 



Full Legal-tender 

Silver. 



$549,700,000 
434,300,000 



105,000.000 
48,000,000 



81,000.000 



$1,218,000,000 



Limited Tender 
Silver. 



$75,600,000 

59,900,000 

112,000,000 

110,000.000 

6,900,000 

6,700,000 

6,400,000 

40,000,000 



$414,500,000 



13 

You will see tliclt this country has fire hundred and forty-nine millions of full 
legal-tender silver, including the one hundred and thirty millions of silver back 
of that amount of Treasury notes, in addition to seventy-five millions of sub- 
sidiary silver, an aggregate of six hundred and twenty-five millions of silver 
money — almost exactly the same as we have of gold (one thousand two hundred 
and fifty millions of gold and silver), whereas in 18G0 we had only two hundred 
and fifty millions of both gold arid silver money, of which not over fifty mil- 
lions was silver, not over fifteen millions of this silver being full legal tender. 

Mr. Burns. I am surprised at these figures from the report of the Director 
of the Mint, for I had got the improsssion from statements made by Coin that 
the world had deprived itself almost entirely of silver as money, whereas it 
seems that to-day as much silver is being used as money as there is of gold. I 
suppose, however, that very little silver has been coined in the world the past 
few years, and that this may have had a specially temporary depressing influ- 
ence on silver. 

Mr. Smith. I know that this is alleged to be the case, and yet the world 
has used far more new silver as money the past five years than ever before. 
The Director of the Mint states in his last report that while up to 1865 Icvss 
than S28,O0O,O0O of new silver was coined in any one year, yet the silver coin- 
age of the world in 1893 was .$135,000^000, of. which one hundred and twenty 
millions was new silver — four times as much as was coined in any one year be- 
fore the war. In 1893 Mexico coined twenty-eight millions of silver, India thir- 
ty-nine millions, Austria eighteen millions, Japan twelve millions, this country 
eight and three-quarter millions (fifty-four millions annually having been used 
by us as money for each of the three previous years). Great Britain five millions 
and Germany two millions. 

Mr. Jones. Evidently those who are asserting that the world is now de- 
prived of half of its money because of what they call "demonetization" don'1 
know what they are talking about. 

A CONDITION OF UNLIMITED COINAGE. 

Mr. Smith. Many of them do not want to know. The difficulty which we 
are trying to get the commercial world to unite with us in overcoming is not 
that silver is not used by the world to as great extent as gold as money (for 
it is), but that the leading commercial nations do not coin it as full-value 
money, which is essential in free and unlimited coinage, but as token money that 
must be maintained at par directly or indirectly by redemption. Of course sil- 
ver monometallic countries on a silver basis, like Mexico and China, do coin it 
as full-value money, but at such a ratio as drives out gold and gives them only 
silver. 

What we are seeking to do is to secure the co-operation of a sufficient num- 
ber of the leading commercial nations in an international agreement on a coin- 
age ratio that can be maintained with free coinage, and thus give us and these 
co-operating nations both silver and gold as our final redemption money. Exper- 
ience has shown that no one country can bring this about alone — certainly not 
at any such ratio as that proposed by the 16 to 1 silver men. 

Mr. Vance. I have here a free coinage book which states that when there 
is free coinage of both metals by any one country, like the United States, at 
any ratio, an unlimited demand is created for silver at the fixed price estab- 
lished by the ratio thus determined, and that this at once makes a price for sil- 
ver for the whole world. This book says that is conceded. 

Mr. Smith. As Josh Billings quaintly remarked, "It is better not to know 
so many things than it is to know so many things that ain't so." What you have 
read in that book is an absurd exaggeration of the bimetallic theory as expounded 
by its scientific defenders. They never claimed for the compensatory or alter- 
ing principle of bimetallism any such potency as this. 



18 

They simply claimed what is true, that where several leading commercial 
countries adopt substantially the same coinage ratio for gold and silver, and that 
ratio when hxed approximates the bulion ratio, then whenever one of the metals 
begins to rise the demand for the cheaper metal is increased and the demand 
for the more costly metal is diminshed, and this alternating increase and decline 
in demand tends to maintain the two metals at an equilibrium so long as the 
condition of production does not materially change, and the potency of this 
compensatory principle depends upon the commercial strength of the union of 
countries opening their mints at a common ratio. 

Mr. Vance. But if the United States stands ready to take all the silver that 
is brought to our mints at $1.29 per ounce (which is the price required to make 
the coinage ratio 16 to 1) and pay for it in silver dollars coined from the silver 
bullion, why does that not make a price for the world's silver? 

Mr. Smith. I remarked at the beginning of our discussion that the "fiat" 
fallacy of money is at the bottom of this free silver, 16 to 1, movement. And 
Mr. Vance now owns up. You assume that when the Government, under free 
and unlimited coinage, stamps 50 cents worth of silver "one dollar" and gives it 
the legal-tender power, then this "fiat" of law at once adds 50 cents to the 
value of the silver and makes it worth everywhere 100 cents, as good as a 
gold dollar, and to an unlimited extent. 

Mr. Jones. As I understand it, under free coinage the Government does 
not buy any silver; it simply takes the silver brought to the mints by private 
owners and coins it into silver dollars containing 412% grains of standard sil- 
ver. Why, then, do you say that the Government by this operation fixes the 
price of silver at $1.29 per ounce, in the face of the fact that silver can be 
freely bought in the market for half that price. 

WHAT UNLIMITED COINAGE OF SILVER MEANS. 

Mr. Vance. Because the owner of the silver receives one silver dollar and 
twenty-nine hundredths of a silver dollar for each ounce of his silver. So long 
as any owner of silver can exchange his silver in this manner it seems to me as 
if the price was fixed at that figure for the whole world. 

Mr. Smith. Don't you see that what the owner receives for each ounce 
of his silver dollar is what one silver dollar and twenty-nine hundredths of an- 
other dollar will bring in the market? And that after a brief time, under free 
and unlimited coinage, the value of this dollar and a fraction will be simply the 
value of so much silver bullion? 

In other words, free and unlimited coinage of silver don't create an "un- 
limited" demand, but simply the limited demand for that kind of coin in the 
country where minted. Neither does it establish a "fixed price"— only the vary- 
ing price of so much bullion. 

You have simply fooled yourself by your talk of an unlimited demand at a 
fixed price, and all because you have swallowed whole the * fiat" fallacy of the 
nature of money. 

Mr. Burns. As you remarked a little while ago, it seems' to me that if 
Government can make a piece of silver worth anything it stamps on it, it 
would be far better not to waste 50 cents' worth of silver in making a dollar, 
when an almost valueless piece of paper can be made a dollar by having the 
Government stamp it such. It looks to me as if the old fiat greenbackism 
was much better than this modified form of silver "fiatism." 

Mr. Smith. You are right. The only influence that free and unlimited coin- 
age of silver can have on the value of the coin and the silver of which it is made 
is that exerted by the probable increase of demand for silver; but the increased 
demand arising from the opening of the mints of only one country would be 
too email to materially affect the price. A union of leading commer- 
cial nations on a fixed common ratio, having regard for the bullion 



14 

ratio, would exert a potent influence not only in somewhat raising the price of 
silver bullion, but also especially in steadying the relative value of the two 
metals by the influence of the alternating or compensating influence of bimetal- 
lism of which I have spoken. 

THE FRENCH EXPERIENCE. 

Mr. Vance. I read in "Coin" that for over seventy years, from 
1800 to 1873, France maintained silver and gold at a market ratio of 15l^ to 
1 by opening her mints to the free coinage of silver at 15^/^ to 1. If France 
alone did this, why can't the United States, which is a more populous and im- 
portant country than France, by independent action maintain free and unlimited 
coinage of both metals and keep them together as France did? 

Mr. Smith. There are two answers to the assertion. First, that 
not only France, but all Europe (England excepted) coined silver at approx- 
imately the ratio of 15i/^ to 1 from 1800 to 1870; so that whatever influence 
was exerted on the piece of silver by governmental action was not exerted by 
France alone, but by nearly all Europe. And secondly, that during these seven- 
ty years there was no material change in the conditions and cost of silver pro- 
duction. The average annual production of silver was $37,000,000 from 1800 
to 1810, $22,000,000 from 1810 to 1820, $19,000,000 from 1820 to 1830, twenty- 
four and three-fourths millions from 1830 to 1840, $32,000,000 from 1840 to 1850, 
$37,000,000 from 1850 to 1800, and $50,000,000 from 18G0 to 1870— a change 
so small as to make stability a necessity; while the increase of production of 
silver since 1870 has been by leapa— $81,000,000 in 1875, $120,000,000 in 1880, 
$142,000,000 in 1888, $173,000,000 in 1890, and $196,000,000 in 1892. 

Mr, Jones. How long were France and the other countries oi 
the Latin Union (Belgium, Switzerland, Italy and Greece) able to withstand this 
early increase of silver production and the closing of the German mints in 1871*: 

Mr. Smith. In 1874, when the production of silver had reached 
only eighty-one millions, all these countries acting together found they could 
not overcome even the slight deviation of 5 per cent, from the ratio of 15% to 
1, and were obliged to suspend the coinage of full legal-tender silver. And 
not a dollar has been coined for private owners of bullion since. 

The experience of France is a most complete demonstration of the impossi- 
bility of the United States alone opening its mints to the free and unlimited 
coinage of silver at 16 to 1 without driving out gold and making us a silvei 
monometallic country. 

In reply to an inquiry, M. Ribot, the French minister of finance, said a 
few months ago, in the Chamber of Deputies, that, while France was anxious 
to secure bimetallism and was ready to join with other nations to bring it 
about, yet that neither France nor any other country alone could accomplish 
this result, 

THE EXPERIENCE OF THE UNITED STATES. 

Mr. Burns. How about the experience of the United States? 

Mr. Smith. As I have already said, the experience of the United 
States has shown the impotency of one country alone in materially affecting 
the market, ratio of gold and silver by adopting a coinage ratio even but 
slightly different from the bullion ratio. The ratio of 15 to 1 adopted by the 
United States in 1792 undervalued gold about 2 per cent., and the result was 
that between 1792 and 1833 less than ten millions of gold were taken to our 
mints for coinage, while over forty millions of silver were coined. Of the forty 
millions of specie estimated by Secretrry of the Treasury Gallatin to have 
been in this country in 1833, not even five millions were gold. 

In 1834 we changed the ratio to 16 to 1, so as to secure gold as well aa 
silver, but the new ratio undervalued silver about 2 per cent. The result waa 



15 

that even this small divergence from the actual bullion ratio brought less than 
thirty-five millions of silver to the miuts between 1834 and 1854, while two hun- 
dred and fifty millions of gold (the cheaper metal) were coined. Indeed, the sil- 
ver coined went to the melting pot so rapidly that in 1853 Congress was com- 
pelled to reduce the weight of subsidiary silver and make them token coins. 

And I have already said of the two hundred and fifty millions of specie 
estimated by the Secretary of the Treasury to have been in this country in 
18G0 probably not over ten millions was full legal tender. 

After such an experience as this it is absurd for anyone to claim that this 
country alone can maintain bimetallism by free and unlimited coinage of sil- 
ver at 16 to 1 when the market ratio of bullion is 30 to 1. 

Mr. Jones. I think it is clear that the only way we can have both silver and 
gold as our money under free and unlimited coinage is by making the coinage 
ratio approximately the same as the ratio of the bullion value of the two metals, 

Mr. Smith. It ought to be apparent to every one that the Government can- 
not make 16 ounces of silver equal in value to 1 ounce of gold by fixing 16 to 1 
as the ratio for free and unlimited coinage of silver and gold, unless approxi- 
mately 16 ounces of silver will exchange for 1 ounce of gold in the markets of 
the world. To establish such a ratio when the market ratio is now about 30 
to 1 is practically to say that we intend to have nothing but silver as our money 
and to make 50 cents' worth of silver the dollar and unit of value, for not one 
dollar of gold would be coined under such a law, and what gold we have coined 
would at oiLce cease to be used as money. 

THE EXPERIENCE OF MEXICO. 

Mr. Jones. What has been the experience of Mexico, which maintains the 
policy of the equal and unlimited coinage of silver and gold at a ratio of IG^/^ 
to 1? 

Mr. Smith. Well, let us look at that country near our own doors, which 
has tried and is trying the policy which is urged upon us ostensibly in the in- 
terest of bimetallism. 

Mexico has unlimited coinage of both gold and silver at the ratio of 16% 
to 1, valuing silver a little less than our 16 to 1 silver advocates propose, with 
a uniform charge of 4 per cent, for coining either metal. And after trying this 
policy ever since the market value of silver declined, resolutely refusing to join 
in any "crime of 1873," she has become what? AVhy, a silver monometallic na- 
tion on a silver basis, without any gold in her metallic money. That is what 
16% to 1 silver coinage has done for Mexico, and what 16 to 1 unlimited silver 
coinage would do for us. 

", Mr. Vance. But Mexico is a comparatively small country, and we cannot 
judge what free coinage at 16 to 1 by this country of 70,000,000 people will 
do by what has taken place there. 

Mr. Smith. Why not? The "fiat" of Mexico is as potent within its limits 
as the "fiat" of the United States is within ours. Besides, Mexican dollars 
have an advantage over the silver coins of any other country — they are current in 
China, which has a population five times as great as the United States. The ex- 
periment of Mexico is practically the experiment of more than 400,000,000 people. 

Mr. Jones. A gentleman who recently visited Mexico told me that he carried 
with him to that country some American silver dollars, which, having been 
coined for the profit of our own Treasury, are maintained at par with gold by 
indirect redemption by our Government, and that he frequently made a purchase 
of an article whose price was 50 cents and on giving to the seller one of our 
dollars, received the article which he had purchased and a Mexican dollar 
besides. 



16 

Mr. Smith. Certainly; for every dollar of our money has a purchasing power 
of 100 cents in Mexico as well as in this country; but every dollar of Mexican 
money, although called a dollar, has a purchasing povrer of only 50 cents there 
or here. 

Mr. Vance. Prices there are higher than here, and that is a good thing. 

Mr. Smith, Yes, prices are higher, just as they would be here if we should 
cut our dollar into halves and call each half a dollar. But notwithstanding 
prices are higher, estimated in Mexican dollars, not one article thus elevated 
in price will exchange for any more of any other product than it would have 
done before? 

Mr. Jones. How is it with imported articles? 

Mr. Smith. Every imported article sells in Mexico for twice as many dollars 
as before, with an extra charge for brokerage because of the uncertainty of 
the value of their money. 

^ Mr. Jones. How does it affect articles exported by the Mexicans? 

Mr. Smith. As all her exports are sent to countries on a gold basis, and to 
pay for them these countries buy silver exchange at a profit, with an added broker- 
age for the uncertainty of the value of silver, the Mexicans get less for what 
they export than they would if they were on the same basis as the leading com- 
mercial nations. 

Mr. Burns. TNTiat has been its effect on labor? 

Mr. Smith. Wages have not risen as much in Mexico as prices have risen. 
In other words, a depreciated currency has cheated the laborer, as it always 
does. 

But it is getting late and we must postpone further conversation on this 
interesting question to some other evening. I can meet here again with you on 
next Monday evening if you desire to continue the discussion. 

Mr. Vance, Mr. Smith and Mr. Burns (speaking together). By all means, 
let us continue this talk. 

Mr. Smith. Let it be understood then that we will meet here next Monday 
evening and continue this conversation on silver and money. 



SECOND EVENING. 

It was five minutes earlier than the time set for the reassembling of the 
four neighbors who had met on a previous evening to talk over the silver and 
money question when Mr. Smith, Mr. Jones, Mr. Vance and Mr. Burns took 
their seats around the little table on which the lamp rested. 

Mr. Vance, leaning back in his chair and holding up one end of a worn copy 
of the silver mine owners' pamphlet called Coin's Financial School, opened the 
conversation. After thinking over the facts brought out at our previous meet- 
ing I am not disposed to contend that silver has not fallen somewhat, but it 
seems to me that gold has risen much more than silver has fallen. 

Mr. Smith. Even supposing this to be the fact, that would not change the 
situation. So long as the market ratio between silver and gold is 30 to 1 it 

15 absurd to contend that the United States alone can set up a coinage ratio of 

16 to 1 and obtain bimetallism, no matter what caused the divergence. 

It is the fact of the market ratio with which we must deal, no matter 
(vhether it is caused by gold rising or silver falling, or both. Even if it were 
established that the divergence of the two metals from the old ratio of 16 to 1 was 
caused entirely by the rise of gold, this would not in any manner change the fact 
chat the adoption of free coinage of silver at 16 to 1 would give us nothing 
but silver in our coinage. 

Mr. Vance. But has not gold appreciated since 1873? 

Mr. Smith. The opinion of experts like -Professor Fawcett is that gold de- 



" 17 

olined (many think 10 or 15 pes cent.) between 1850 and 1865, in eonsequeiice 
of the increased production, notwithstanding most of the increased production 
was offset by increased demand; and that it appreciated between 1870 and 
1891 just about as much as it declined between 1850 and 1865. The Director of 
the Mint, as well as Professor Fawcett, thinks that the largely increased pro- 
duction of gold since 1891— already larger than in the palmiest Californian 
and Australian days — has stopped the appreciation, and that the probabilities 
are strong that in the near future another decline of gold will set in. 

But it must be remembered that by common consent gold varies less in value 
than any other substance — but a fraction of a cent in any one year — and that 
for this reason the commercial world makes it the international standard of 
value. 

"When gold was declining, between 1850 and 1860, even the "fiat" money 
men looked very kindly on gold, and were entirely content to have it the prac- 
tical standard of value. c 

;If it were true that gold has risen and silver remained stationary— which it 
is not — this fact would furnish an excuse for reducing the weight of the gold dol- 
lar, but not the slightest ground for trying to have free coinage at the ratio of 
16 to 1. The ratio v>-ould still be 30 to 1 if the gold dollar should be reduced 
one-half and the silver dollar be left as it was. 

Mr. Burns. That is evident, and yet at first view many overlook this fact. 

INCREASE OF GOLD PRODUCTION. 

Mr. Smith. I ask you to notice particularly the large increase of the 
world's production of gold since 1890, as shown by the figures I read the other 
evening from the report of the Director of the Mint: 

1890 $118,489,00011894 $170,000,000 

1891 130,579,00011895 203,000,000 

1892 146,817,00011896 (estimated) 250,000,000 

1893 157,000,0001 

Mr. Vance. But with the world's production of gold this year estimated at 
$203,000,000, is not a large proportion of it used in the arts, so as to leave al- 
most none for coinage? 

Mr. Smith. The Director of the Mint estimates the world's annual consump- 
tion of gold in the arts at $60,000,000, and Mr. Soetbeer at $90,000,000, and tak- 
ing the highest estimate the gold remaining for new coinage in 1895 would be 
$133,000,000 and in 1896 about $160,000,000. Bearing in mind that the 
precious metals used in coinage are not consumed from year to year, but added 
to the accumulated stock, this annual increase of $150,000,000 in the world's 
stock of gold money is noteworthy, especially in view of the fact, as stated by 
Professor Pawcett, that Great Britain requires only $15,000,000 of new gold 
for monetary purposes each year. 

Mr. Vance. Coin assumes that gold has appreciated 50 per cent since 1873. 

Mr. Smith. "Assumes" is good. There is not the slightest evidence of any- 
thing of the kind. 

Mr. Vance. Coin, if I understand him, claims that prices have declined 50 
per cent since 1873, and as gold is the measurer of prices, that this proves that 
gold has risen 50 per cent. 

Mr. Smith. I shall take occasion before we are through to show you that 
between 1873 and 1892— and of course the great fall of prices the past years is 
due to exceptional causes entirely outside of gold or silver— the average de- 
cline of prices, as shown by Labor Commissioner Wright's investigations under 
the direction of the Senate Committee on Finance, in 1801-92, was only 20%, 
points. And between 1879 (when we resumed specie payments) and 1S92 only 
In.— B.— M. & S. 



18 

4^ points. Of course the prices of 1873 were inflated by a depreciated currency 
and the effects of the war, from which we did not fully recover till 1878, and 
are not a fair basis for comparison. 

Coin makes his argument entirely on cotton and wheat, which declined more 
than other products, for reasons of which I will hereafter speak. 

Everybody knows that all products into whose production machinery or other 
labor-saving devices enter are constantly and naturally declining under the 
stress of competition, and it is simple nonsense to contend that a fall of prices 
of such articles shows that gold, which measures prices, has appreciated to the 
extent of the decline of prices. 

By taking all articles together— all machine-made articles naturally decline — 
a fall in prices of only 4% points between 1879 and 1892 shows that there 
could have been very little of the decline due to an appreciation of gold. 

THE STANDARD OF VALUE. 

Mr. Jones. Much is said now about a double standard. It seems to me 
from what you have said that there can be practically but one standard in any 
country at the same time. 

Mr. Smith. Strictly speaking, that is true. The term double standard, 
which seems to me to be an unfortunate term, is used by financial writers as a 
synonym of bimetallism and simply means that the dollar unit is measured 
in two money metals adjusted to each other at such a ratio as to be equivalent 
in value, thus making two equal units but one and the same, therefore really 
one standard so long as the equality continues. And, of course, their idea is 
that the equality shall be maintained in fact. So long as the equality of value 
of the two metals is preserved and both gold and silver circulate concurrently 
the standard is gold or its equivalent, but both metals are used as money. 

But our 16-to-l silver advocates mean by "double standard" that silver 
shall be coined at such a ratio to gold that only silver will be minted. This 
is a "double standard" on paper, but in fact a single silver standard and a single 
metal (silver) used as money. 

It is for this reason that, if we should to-day authorize the free and unlim- 
ited coinage of silver at 16 to 1, the silver dollar would at once become the 
practical unit, and thus our unit or standard of value would be suddenly 
changed from the gold 100-cent dollar to the silver 50-cent dollar, and nothing 
but silver would be used as money. I think those who advocate this change 
hardly realize the shock such a sudden change would give to business and what 
a panic it would create. A railroad collision would be a pastime compared with 
it. When we changed from gold to a depreciated paper standard in 1861-1866 
it came about so gradually that the change was slowly discounted. 

Mr, Vance. Inasmuch as a silver dollar of 412% grains of standard silver 
was the legal unit prior to 1873, why not return to it? 

Mr. Smith. As I have said already^ the silver dollar was no more a legal 
unit between 1792 and 1861 than the gold dollar, and not the practical standard 
at all after 1884. The practical standard was the gold dollar from 1834 to 
1861, and from 1861 to 1879 the depreciated greenback dollar. 

The objection to now making 412% grains of standard silver as a legal 
unit is that silver is not what it was in 1792, nor even from 1834 to 1861. It 
has, first, greatly depreciated in consequence of a reduction of cost of pro- 
duction; second, the changed conditions of production have made it much more 
variable in value and therefore less suitable as a standard than it was a hun- 
dred years ago; third, all the leading commercial nations, which a hundred 
years ago made silver their standard, now make grains of gold their unit or 
standard of value, so that in fact international prices are everywhere fixed in 
gold and not in silver. 



19 

Mr. Vance. When gold Is made the standard we make our dollar cost 

twice as much as we do when silver is made the standard. 

DISTINCTION AS TO GOLD AND SILVER COINAGE. 

-Mr. Smith. Not if we coin both metals at their bullion ratio. Of course, if 
we coin silver at its bullion value and gold at twice its bullion value, we should 
make one dollar twice as valuable as the other. The question as to what any- 
country will make its standard is entirely distinct from the other question 
as to how many grains it will put in its unit. We can depreciate our dollar unit 
just as well by making 13.3 grains of standard gold the unit as by making 4121/^ 
of standard silver the unit. 

If we intended to depreciate the dollar one-half, and at the same time keep 
both metals in our coinage with free and unlimited coinage it would be a great 
deal better to diminish the weight of our gold one-half than to diminish 
it one-half by establishing free coinage of • silver at 16 
to 1. In the former case we should have 50-cent dollars of both silver and 
gold, and in the latter case we should have 50-cent dollars only of silver and no 
gold. 

Mr. Jones. That is a good idea. If we are going into the business of de- 
preciating our dollar so as to pay our debts easier— for I suppose that is the real 
animus of the 16-to-l free silver movement outside of the silver-mine interest — 
it is better to do it squarely, by reducing the weight of the gold dollar one- 
half, and then coining the 412i^.-grain silver dollar alongisde of it, as in that 
case we should have both gold and silver dollars of equal value and real bimetal- 
lism. That would be free coinage at a ratio of 30 to 1, whereas free coinage 
at 16 to I would give us nothing but silver. 

Mr. Smith. That is it. Nobody would be deceived by that, although I pre- 
sume when fully stated the men who want to depreciate the dollar like the de- 
ceptive method better. 

Mr. Burns. What could possibly be gained by bimetallism with silver for 
the unit of value over gold for the unit, if it is proposed to coin at such a ratio 
as will give us both metals as money? 

Mr. Smith. Obviously nothing. There would be a loss, however, in adopt- 
ing a different metal as the standard of value from that adopted by the con- 
trolling element of the commercial world; and, worse than that, we should have so 
variable a standard of value as to subject us to constant friction and broker- 
age to compensate for the uncertainity of the future value of silver. 

Indeed, there is another view of it which ought to impress the advocates of 
a cheap dollar. This is that silver has fallen in value, and is undoubtedly too 
low to-day to encourage its production; and if we should now adopt a silver 
standard we should soon find our dollar increasing in value. Would it not be 
funny to see the advocates of a silver basis to-day contending, if silver should 
rise, that debts contracted under a silver basis were being increased by the 
rise of silver and advocating the making of copper the unit of value to protect 
debtors? 

INTERNATIONAL BIMETALLISM. 

Mr. Jones. It seems to me that nothing is clearer, from tJie examples you 
have given, than that the influence on the price' of silver of unlimited coinage 
of both metals by any one country alone is very small, but that when the lead- 
ing commercial nations unite on a coinage ratio, under free coinage, they to- 
gether exert a very strong influence, not only in maintaining the relative price 
of the two metals, but also in steadying their value. 

Mr. Smith. You are right. The influence exertcxi is that of demand for 
monetary uses. The demand of one country exerts a slight influence, but the 



20 

demand of the leading commercial nations acting in unison at a fixed ratio is 
a potent force, although of course even the united demand of the leading com- 
mercial nations must have regard to the probable production of each metal 
at the coinage ratio. 

The small influence of the United States alone in maintaining the price of 
silver is shown by our experience under the Bland silver-purchasing act of 1878 
and the amendatory act of 1890. Under the former act we purchased about 
$27,000,000 worth of silver annually for fifteen years to use as money, and 
silver continued falling every year. Under the act of 1890 we purchased for 
three years 54,000,000 ounces of silver annually, over a third of the world's 
product, and substantially the whole of the American product; and yet, after 
a brief speculative spurt, the price of silver went on declining, simply because 
the new demand we had created, promising an increase of price that offered a 
big profit, simulated production. 

Now, with free and unlimited coinage of silver at 16 to 1 the United 
States could not coin so much silver in three years as we purchased from 1890 
to 1893. How absurd, therefore, it is for any one to contend that free coinage 
by this country alone would raise silver from 68 cents to $1.29 per ounce. 

On the other hand, the influence exerted by nearly all Europe, as well aa 
the countries of this continent, coining silver and gold at substantially the same 
ratio prior to 1870, was well shown during the great Id crease of gold produc- 
tion between 1850 and 1860. To be sure, during that period the increase of gold 
was offset by a general tendency throughout the world to use more gold and 
less silver as money — a tendency arising from the greater convenience of the 
less bulky money as transactions increased in magnitude, and which of course 
is beyond the reach of iaw, 

WE BEAR THE BURDEN. 

Mr. Burns. I think you have made it clear that international bimetallism is 
the only practical bimetallism, and that we should steadily seek to bring that 
about. 

Mr. Jones. And so long as we give Europe hope that we propose to sus- 
tain silver alone, Europe will look on and let us bear the burden. 

Mr. Smith. That is so. Nothing is exerting so great an influence to pre- 
vent the successful reestablishment of bimetallism as the 16 to 1 free silver 
agitation in this country, which encourages Europe to think that we will con- 
tinue to assume the burden alone. 

Mr. YancG. But if no leading commercial nations of Europe will unite with 
us in international bimetallism, isn't it our duty to try it alone? 

Mr. Smith. I have clearly shown that neither the United States nor any 
other nation can secure bimetallism alone, certainly not at any such ratio as is 
proposed, and the silver-mine owners won't permit a ratio equivalent to the bul- 
lion ratio. For us to attempt it alone at a ratio of 16 to 1 is simply to drive 
out gold and have nothing but silver. There would be no serious opposition to 
coining silver at its bullion value— certainly none beyond the fact that its bul- 
lion value would be unstable if European nations did not unite with us. 

Mr. Vance. But we didn't drive out gold after 1878 when we began again 
to coin silver. On the contrary, our gold increased. 

Mr. Smith. I have already explained that the silver dollars we have coined 
since 1878 have been coined by the Government for its own profit, and main- 
tained at par with gold by limitation and indirect redemption. Of course such 
money is equivalent to gold. But silver coined under free and unlimited coin- 
age for private owners of bullion is a very different thing, and depends en- 
tirely on the value of the bullion. 

'I have little doubt that if we hold where we are, sooner or later enoijgls 
European nations wUl iinite with us to make bimetallism a succesa 



21 



All authorities in bimetallism, both, in this country and Europe (outside of 
eome politicians in this country), ho)d that bimetallism is possible only by a 
co-operation of leading commercial nations. President Andrews, Professor 
Walker, and the late Dana Horton are pronounced in their opposition to the 
16-to-l silver movement, regarding it as sure to bring, not bimetallism, but 
silver monometallism. 

THE ATTITUDE OF THIS COUNTRY AND FRANCE. 

Mr. Vance. Then it fieems to me that the alternative this presents' is the 
gold monometallism which we now have, unless we can persuade other coun- 
tries to unite with us in restoring bimetallism. As between our gold mono- 
metallism and silver monometallism I prefer silver monometallism. 

Mr. Smith. You are entirely mistaken in assuming that we now have gold 
monometallism. Great Britain is a gold moiiometallie country, because it coins 
no full legal-tender silver, using only a small quantity of silver for subsid- 
iary coins. 

But the United States aad France— for both are pursuing the same policy 
toward silver — are limited bimetallic countries which use a large volume of full 
legal-tender silver, and are steadily seeking by international action to bring com- 
mercial countries into an international agreement on a coir. age ratio under free 
coinage that will insure full bimetallism. 

The United States, as I have already stated, uses over six hundred mil- 
lions of silver asi money — as much silver as gold — of which five hundred and 
forty-nine millions is full legal-tender. And France uses a little more than half 
as much full legal-tender silver as she does gold. 

We hear much said about what is styled the "unfriendly attitude" of the 
United States toward silver, and yet as a matter of fact this country has 
gone to the very verge of safety, if not beyond, in its efforts to maintain silver 
as a money metal and meet the wishes of silver-mine owners. After what 
we have done it is rank injustice to stigmatize any considerable body of our 
people as "silver haters" or "goldbugs." 

Mr. Jones. That is, the situation demands that we shall hold on to the lim- 
ited bimetallism we now have, which give;^ up five hundred and forty-nme 
millions of full legal-tender silver, until we can persuade leading commercial 
nations to unite with us' on an international coinage ratio that can be main- 
tained. And this is just what France is doing. 

ABOUT "BASIC" MONEY. 

Mr. Vance. But notwithstanding we as well as France use this large vol- 
ume of full legal-tender silver, yet, as Coin says, none of this siher is final- 
redemption money; therefore really as to basic money we have nothing but 
gold. 

Mr. Smith. You mean by "basis" or final-redemption money, property 
money, which has in itself the full value that it purports to be. 

That kind of money must necessarily be gold or sih'er coined at its actual 
bullion value — money worth just as much before the piece of metal is coined 
as after; and the only reason we do not have silver money of that kind is that 
you and the 16-to-l silver men who agree with you will not allow it to be 
coined at its bullion value. 

In other words, you insist that it shall be coined at a ratio which prevents 
it from being "basic" or final redemption money, and not at its bullion ratio, 
and then turn around and find fault because our silver is not final-rodemptiou 
money, i. e., money of full value intrinsically. 

) Mr. Vance. But we insist that silver would be fiual-redemptiou money if 
It should have free coinage at 16 to 1. 



22 

Mr. Smith. Yes, final-redemption money for -whatever the silver in each 
dollar is worth, but no more, just as silver bullion is now practically final- 
redemption money for what it will sell for. Your 16-to-l plan contemplate-s 
that our only "basic" money shall be silver, as gold would be driven out. 

No one would welcome any plan that would assure both silver and gold 
as final-redemption money more heartily than myself. What I object to is 
the 16-to-l plan, that would leave us nothing but depreciated silver rs "ba- 
sic" money. 

The claim of the 16-to-l free silver men that they are "bimetallists" is with- 
out any foundation. They are silver monometallists and friends of a silver 
basis. 

Mr Burns, I am fully convinced that is the fact. 

VOLUME OF CURRENCY. 

Mr. Vance. The remonetization of silver would have a most beneficial ef- 
fect on prices by increasing the volume of our final-redemption money, for, aa 
Coin says, this volume largely determines prices. 

Mr. Smith. So far as the volume of money in any country affects pricea 
it makes no difference what the character of the money is so long as it is equal 
in value to gold. Our present volume of silver and paper, and even substitutea 
for money, like checks and bills of exchange, have the same effect on" prices aft 
gold money has. Indeed, it is only money used that affects prices. Monej» 
unused don't affect prices. 

Mr. Vance. I think the source of our trouble is want of suflBcient money 
to transact business. 

Mr. Smith. Even if this were so, your 16-to-l scheme, which would drive 
out gold, wouldn't give us more money, but much less. Indeed, by injuriously 
affecting its quality, it would seriously affect our business. 

But as a matter of fact we never had so much outstanding money as we 
have had the past few years (sixteen hundred millions), about twice as much 
per capita as we had before the war. 

The trouble is that on account of distrust, which causes depression of busi- 
ness, only a part of our money is used. A large part is unused. We find 
money apparently scarce because it is inactive, while in fact the outstanding 
volume never was so large. You confound inactivity, caused by want of con- 
fidence, with scarcity; and your remedy is to so manipulate the currency as to 
increase the distrust. You might add hundreds of millions to the currency and 
make matters worse by increasing the distrust. 

You must remember that however much money is authorized nobody can get 
it without paying for it. Even with free coinage of silver at 16 to 1 only the 
owners of silver bullion can take advantage of it. And they won't give 
away their dollars, you may rest assured. 

BIMETALLISM WITHOUT GOLD. 

Mr. Vance. Let me read from Coin's Financial School: 
In this controversy one point should never be lost sight of, and this is that 
higher prices— bimetallic prices— will come with the remonetization of silver 
(through free coinage at 16 to 1 by this country alone), even though gold goes 
to a premium. 

Mr. Smith. Have you stopped to think of the supreme nonsense of the 
bombastic paragraph you have read from your silver leader? "Though gold 
goes to a premium" (which would of course take gold out of circulation), he 
proposes through free coinage of silver at 16 to 1 to have bimetallism. Don'4 
you realize the absurdity of bimetallism without gold? 



23 



SILVER AND PRICES OF EXPORTS. 

Mr. Vance. But we claim that giving free coinage to silver at 16 to 1 will 
enable us to keep our gold. Let me read from Coin: 

The way to keep our gold is to remonetize silver. Remonetization will 
give us higher prices for our exports and will make a balance of trade in our 
favor large enough to bring us both English gold and silver. 

Mr. Smith. Is it possible you swallow as gospel truth the statement that 
free and unlimited coinage of silver at 16 to 1 — which is what this writer 
means by remonetization of silver — will increase the prices of our products in 
England? 

Mr. Vance. Why not, if it would increase the prices here? 

M. Jones. You seem to think that an increase of prices here caused by 
cutting our dollar (for that is what 16 to 1 free coinage would do) is a real in- 
crease of tke exchangeable value of our exported products. As Mr. Smith has 
said, we do not have any more cloth when we measure it with an 18-inch yard- 
stick than when we measure it with a 36-inch yardstick, notwithstanding we 
continue to call the half-yards yards. 

Mr. Burns. I know from experience during the times we had a depreciated 
greenback dollar that prices raised by diminishing the value of the dollar simply 
delude us and benefit no one except speculators. As I have already said, a de- 
preciated currency always injures the laborer. 

Mr. Smith. What you have said is all true, but I want to call Mr. Vance's 
attention to the fact that when we sell our exports in English markets the prices 
are estimated on a gold basis and not on a silver basis. If we should make 
one dollar 50 cents, and thereby appear to double prices here, that would have 
no effect on prices in England or other countries in Europe, where prices are 
estimated in gold; on the contrary, it would diminish the return of the former 
by imposing a brokerage charge because of the fluctuations of silver. 

A SILVER BASIS. 

Mr. Vance. I have here a pamphlet on A Silver Basis, published by the 
American Bimetallic Association, written by Mr. Hillyer, in which it is said that 
bimetallism, as we understand it: 

Is not the constant contemporaneous circulation of both gold and silver, 
but that when the silver dollar becomes cheaper than the gold dollar the em- 
ployment of gold should cease and the entire money service be performed by 
silver alone. 

Mr. Jones. Then the bimetallism which you 16-to-l free-coinage men ex- 
pect is that "the employment of gold should cease and the entire monej' ser- 
vice be performed by silver alone," if under free coinage of silver at 16 to 1 
silver should be cheaper than gold? 

Mr. Vance. That is what I understand. ^ 

Mr. Smith, I wish all the 16-to-l silver men were as frank as you arc. 
We could then squarely meet the question of a "silver basis" which the Amer- 
ican Bimetallic Association pamphlet advocates. Isn't it an imi)osition to call 
a scheme "bimetallism" which contemplates the use of silver alone as money? 
Don't you think that the American Bimetallic Association, which indorses 
this pamphlet by sending it out and placing its imprint upon it, had better 
change its name to American Monometallic Association, so that its name may 
agree with its purposes? 

Mr. Burns. I think that would be the honest thing to do. 

Mr. Vance. I am gratified to say that I am in favor of silver monometal- 
lism and a silver basis; and I think this pamphlet has clearly shown that it 
-would be better for us to have silver and let our gold slide than to go along 
as we are. 



24 

OUR FOREIGN TRADE AND A SILVER BASIS. 

L/et me read from this pamphlet the advantages which would come to our foiv 
eign trade on the whole. While admitting that the adoption of a silver basis 
might "increase the fluctuations of the rate of exchange" in our trade with 
the gold-standard nations of the world, and of course hamper and injure this 
part of our foreign trade, yet he says their population is only 300,000,000; 
and what we would lose in our trade with them "would be offset by closer 
trade relations that would come with the silver-basis countries, whose popula- 
tion is 900,000,000." 

Mr. Smith. Yes, I have heard that plea privately made before; and I am 
glad the American Bimetallic Association is getting up its courage to avow 
that a "silver basis" is what they expect and to squarely defend it. 

Now let me examine the claim that our foreign trade with silver-basis 
nations is more important than that with gold-standard nations^ 

OUR TRADE WITH SILVER COUNTRIES. 

In the first place, this pamphlet includes Russia, Argentina, Brazil, and 
the Spanish, French, English and Danish West Indies among the silver-basis 
countries. Ttie first three are on a depreciated paper basis and the remainder 
on a gold basis; so that 150,000,000 of population must be deducted from the 
900,000,000 assigned to the silyer-basis side, leaving 750,000,000 to 350,000,000 
on the other side. 

Now, as a matter of fact, the 350,000,000 people that are on a gold basis 
consume of imported products far more than the 750,000,000 on a silver basis. 
The fact that they are on a silver basis — which, the writer admits, subjects a 
people to "greater fluctuations in exchange," that is, greater friction and ex- 
pense—shows that they are not so far advanced, and have a lower stand- 
ard of living and consume less. 

Mr. Jones. Can you give us the aggregate value of our exports to gold- 
basis and also to silver-basis countries? 

Mr. Smith. I can. I find by the report of the Bureau of Statistics that in 
1893, of over one thousand six hundred millions of foreign trade, nearly one 
thousand three hundred millions, or nearly 90 per cent, was done with coun- 
tries on a gold basis, of which seven hundred and sixty-five millions was exports 
and five hundred and thirty millions imports, and only one hundred and seventy 
millions with countries on a silver basis, of which only fifty-two millions was 
exports and one hundred and seventeen millions imports, together with one 
hundred and fourteen millions of foreign trade with countries on a depreciated 
paper basis. 

Mr. Burns, So it seems the 16-to-l scheme proposes to hamper our foreign 
trade with gold basis nations, whose trade with us is one thousand three hun- 
dred millions annually, in order to get the trade of silver-basis nations, -who 
deal with us to the extent of only $170,000,000. Is that the feast to which we 
are invited by the friends of a silver basis? 

Mr. Smith. That is it. Why, our trade with Great Britain alone, which 
Coin proposes to exchange for that of China, in 1893 was $614,000,000, of which 
$421,000,000 was mainly agricultural exports from this country— eight times 
as much as all the silver-basis countries of the world took. 

HOW TO DOUBLE THE VALUE OF PROPERTY. 

Mr. Vance. But let me read again from Coin: 

With silver demonetized and gold at a premium, not one-tenth the hardships 
could result that now afiiict us. Why? First, it vrould double the value of all 
property; second, only 4 per cent, of the business of the people of this nation 
is carried on with foreign countries. Is it not better to legislate in the inter- 
est of 96 per cent, of our business than the. remaining 4 per cent? 



25 

Mr. Jones. How would the free coinage of silver at 16 to 1 "double the 
value of all property?" 

Mr. Vance. By doubling prices. 

Mr. Jones. No man's property wonld have any higher value after you made 
50 cents a dollar than before. Its price estimated in the new dollar unit 
would be doubled, b«t it wonld not exchange for any more of the things he 
wanted to buy than before. 

Any man may sit down and call 50 cents a dollar, and multiply the price 
of property now worth $1000 by 2 and call himself worth $2000, and when 
he has gone through with this imaginative feat he will just as truly "double 
the value of his property" by this process as he would by having the Govern- 
ment depreciate the dollar to 50 cents by free coinage of silver at 16 to 1. 

Mr. Smith. Yes; this is the "fiat" idea of money and wealth again. If 
depreciating the dollar one-half will double the value of all property, why be 
so modest when by calling a 25-cent piece a dollar we can quadruple "the value 
of all property?" 

Mr. Burns. By using paper "fiat" money we could increase "the value of 
all property" a hundredfold. 

Mr. Smith. This fellow Coin, whoever he may be, does not seem to know 
the difference between value and price. Doubling prices by depreciating the 
measure does not change value a particle. Cutting the yardstick in the middle 
and measuring with the 18-inch rule does not give you any more cloth. Value 
is the exchangeable relation of one product to all other products. Price is the 
relation of a product to the standard by which we measure values. 

Mr. Jones. But I know from observation that when there is a depression 
in business it is the easiest thing in the world to make thousands believe any 
absurd theory relative to the influence of the currency on the situation. 

Mr. Smith. If an inquirer will only exercise a little common sense in the 
matter, he will set aside the prices from 1893 to 189(> as exceptional for very 
obvious reasons; and then by comparing the prices of 1840 to 1860 or of 1879 
to 1890 with those of 1891 he finds no difficulty in accounting for the 25 per 
cent, average decline of manufactured products by the increased use of labor- 
saving machinery and the reduction of profit by competition, and for the increase 
of prices of all agricultural products on the farm or at the market near the 
farm (except wheat and cotton) by the fact that they are produced mainly by 
band labor, and by the increase of wages. 

THE FALL OF PRICES. 

Mr. Vance (with his finger on the page of Coin, professing to give the aver- 
ige prices of wheat and cotton in New York from 1873 to 1895) asked if it 
\vas not well-nigh certain that such a fall of prices must have been caused by 
an appreciation of our gold unit, in which prices are measured. 

Mr. Smith. Why do you take 1873 as the point of comparison of prices? 

Mr. Vance. Because that was the year silver was demonetized in this 
country, and this was the beginning of the fall of prices. 

Mr. Smith. As a matter of fact, according to the tables of Labor Commis- 
sioner Wright, who made a careful investigation under the direction of the Son- 
ate Committee on Finance, prices began to rise soon after the inauguration of 
the war of the rebellion in 1801, and rose 30 1-3 points up to 1866. and then 
began to decline, falling 14 1-3 points in the seven years up to 1873, before 
what you call "the crime of 1873" was perpetrated, and when the law authorized 
free coinage of silver, and also fell 13l^ points in the nine years between 1873 
and 1882, when silver was demonetized. 

If the "crime of 1873" caused a decline of ISVj points in prices in the nine 
years after 1873, pray what caused the decline of 14 1-3 points in the sevea 
years before 1873? 



26 

Mr. Jones. Does not the fact that prices rapidly rose during our civil wat 
36 1-3 points and then after 1866 as rapidly declined 14 1-3 points to 1873, 
when the law allowed free coinage of silver, and 40 points to 1879, when the law 
did not allow free coinage of silver, clearly show that silver was not the cause 
of either the rise or the fall? It would be as logical to say that free coinage 
of silver caused the fall of prices between 1866 and 1873 as that repeal of 
free coinage caused the fall after 1893. 

Mr. Smith. Certainly. A mere statement of these facts shows that the 
very natural cau«e of the rise of prices between 1861 and 1866 was the war, 
which took 2,000,000 men from the ranks of producers and made them destruc- 
tive consumers, together with the depreciation of the currency consumers; and 
that the equally natural cause of the fall (aside from the ordinary causes of 
decline of prices of machine-made goods) was the return of the disbanded army 
to productive pursuits and the gradual recuperations and restoration of indus- 
tries and of the currency to their normal condition between 1866 and 1879. 

Mr. Burns. Evidently the rise of prices during the war and the gradual fall 
up to 1879 should be entirely set aside in any discussion of the course of prices. 
A big rise on account of the war was inevitably gradually offset by a corres- 
ponding fall during the period of readjustment and recuperation up to about 
1879, when we got back to specie payments. 

Mr. Jones. How much lower were average prices in 1879 than in 1860? 

Mr. Smith. Only 3 1-3 per cent. 

PRICES AND WAGES. 

Here is Commissioner Wright's table of average prices of 246 articles and 
also of wages from 1840 to 1891, the prices of 1860 being represented by the in- 
dex number, 100 as the basis of camparison, and the index number for each 
year indicating the rise or fall from that basis. I have added the London price 
of silver per ounce for each of the years named: 



Year. 


Average 
prices. 


Average 
-wages. 


Prices 
silver 
per oz. 


1840 


1168 
107.5 
106.4 

S8.7 
103.9 
113.2 
100 
136.3 
117.3 
122 

9e.6 
108.5 

93 

94.2 

92.2 


87.7 
86.6 
89.3 
92.5 
90.4 
99.2 
100 
108.8 
133.7 
148.8 
139.9 
149.9 
150.7 
156.7 
160.7 


$137 


1843 


1.283^ 
1.30 


1846 


1849 


1.31 


1851 


131M 


1856 


1M% 


I860 . .. .. .... 


l.Zbli 


1866 


1.34 


1870 


1.373^ 
1.29^ 
1.13 


1873 . 


1879 


1882 


1.133^ 
1,06 


1885 


1889 


.931^ 


1891 


.98% 







Mr. Burns. What was the average decline of prices between 1879 and 
1891? 

^, Mr. Smith. Only 4i/^ points. That makes the fall of prices between 1860 
and 1891 average only 7% per cent. The average fall of prices of manufac- 
tured articles was about 25 per cent,— some articles, like steel rails and wire 
nails and kerosene oil, falling 80 per cent, and others only 10 or 15 per cent. 
But Agricultural products on the whole advanced in price 2 per cent between 
1860 and 1891. The only two agricultural products that fell in price ^vere 
cotton and wheat. Other agricultural products rose from 8 to 15 per cent. 



27 

Mr. BHms. Why do the 16-to-l silver men always take only wheat and 
cotton when they are talking to farmers about the fall in prices? 

Mr. Smith. For the obvious reason that if they took any other farm prod- 
ucts they would have no' stock in trade. 

Mr. Jones. When they refer to wheat don't they usually take New York 
prices, so as to be able to make the decline on account of reduction of cost 
of transportation, said to be at least 25 cents since 1868, appear to be the 
farmer's loss? 

Mr. Smith. Certainly; that isi one of the tricks of these agitators. And 
they also take cotton because, in consequence of the utilization within a recent 
period of the former waste product of cotton seed, the real cost of produc- 
tion of cotton has been much reduced. 

But I notice that it fe getting late, and we must close for to-night. I have 
discussed somewhat the qu^tion of prices in connection -with silver, and as 
these and payment of debts are the great stock in trade of the 16-to-l free 
silver advocates, I desire to further consider them another evening, if you are 
willing to come here again next Wednesday evening. 

Messrs'. Jones, Burns and Vance (speaking together). By all means we 
will be here. 



THIRD EVENING. 

Just as the minute hand indicated the hour set for the third and last of 
the series of talks of the four neighbors on the silver and money question, and 
the last rays of the setting sun gilded the church spire across the street, 
Mr. Smith, Mr. Jones, Mr. Vance and Mr. Burns walked up the lane by the 
little red schoolhouee, in front of which waved the Stars and Stripes, entered 
the door of the old farm mansion, and took their seats around the old table. 
As promised at the last meeting, Mr. Smith said he desired to add a few words 
to what he had said at the last meeting on the question of prices. 

PRICES OF FARM PRODUCTS ON THE FARM. 

Mr. Jones. Have you the average prices in this country of leading agricul- 
tural products on the farm or in the market nearest the farm in recent years? 

Mr. Smith. The report of the Statistician of the Agrijultural Department 
for 1894 gives them for wheat, corn and oats from 1880. They are as follows: 



Year. 



1880.. 
1881., 
1882. 
1883. 
1881. 
IBS'). 
188R. 
1887. 



Wheat. 


Corn. 


Oata. 




$0.95 


$0 395 


$0.36 




1.19 


.635 


.465 




.88 


.485 


.375 




.91 


.425 


.328 




.645 


.358 


.278 




.77 


.328 


.285 




.688 
.68 


.365 
.445 


.298 

.305 







Year. 



1888.. 
1889.. 
1890.. 
1891.. 
1892.. 
1893.. 
1894.. 



Wheat. 


Corn. 


Oats' 


$0,925 


$0,345 


$0,278 


.698 


.283 


.23 


.838 


.505 


.425 


.84 


.405 


.315 


.625 


.395 


.318 


.538 


.365 


.295 


.49 


.458 


.325 



The average price of wheat on the farms of the country between 1879 
and 1889, it will be seen, was 84.5 cents, and between 1889 and 1891, inclu- 
sive, 81.5 cents; but between 1892 and 1894 it was only 58 cents. There was 
very little change in the average price on the farm until 1892, 1893 and 
1894 — since the exceptional depression of business and reduction of consumption. 
One-fourth less wheat per inhabitant was consumed in 1894 than was consumed 
in 1892. This shows what has had a potent intluence in depressing wheat and 
other farm products in the past three years. The average farm price of corn, 
which is the most important farm crop in this country, betweeu 1$79 and 



28 

1889 was 39.3 cents, and it was 42.4 cents between 1889 and 1894; the aver- 
age price of oats, first period, 31 cents; second period, 33 cents. And the value 
of our oat crop in 1894 was about the same as that of our wheat crop. 

I have also the export prices at New York of bacon, lard, pork, beef, butter, 
and eggs, from the report of the Bureau of Statistics, which shows that all 
of these articles were higher on the average in the seven years from 18S5 to 
1892 than in the seven previous years. 

Mr. Jones. You have given the average price of wheat on the farms, which 
of course includes the price on the farms of the East. Now, have you the 
average price of wheat in different years in Chicago, which gives us a better 
idea of the movement of the price of wheat at the West? The price in the New 
York market, given in "Coin," is obviously misleading, because in that fall of 
prices is included the decline of cost of transportation of wheat from Chicago 
to the seaboard, which has been 25 cents since 1868. This obviously is not 
the loss of the farmer or anybody else, for wheat could have fallen 25 cents 
since 1870 and still the Western farmer would get the same. 

Mr. Smith. I am glad you called my attention to this. Here is the aver- 
age price of wheat in Chicago for the years named: 



Year. 


Range. 


Price. 


Year. 


Range. 


Price. 


18;o 


$0 66 to $1 13 
55 to 1 25 
65 to 921^ 

80 to 1 121^ 
1 07 to 2 26 

85 to 1 55 

77 to 2 03 

1 55 to 2 85 

1 04 to 2 20 

763^ to 1 46 

7334 to 1 31 

993^ to 1 32 

1 01 to 1 61 

89 to 1 46 

81 to 1 28 
83 to 1 30 
83 to 1 26 


$0 90 

87 

80 

90 

1 50 

1 20 

1 30 

2 00 
1 60 
1 10 
1 02 
1 10 
1 30 
1 12 
1 00 
1 05 
1 02 


1877 


$0 01 to $1 26 
77 to 1 14 
81 to 1 33 
86 to 1 32 
95 to 1 43 
91 to 1 40 
90 to 1 13 
69 to 96 
733^ to 913^ 
691^ to 84% 
m% to 943^ 
71 to 2 OU 
75 to 1 08 
94 to 1 03 
85 to 1 16 
69 to 92 
543^ to 88 


$1 30 

90 


18t>l 


1878 


1862 


1879 


1 Oi 


18(58 


1880 


1 OS 


1864 


1881 


1 16 


1865 


1882 

1883 


1 14 


1866 


1 00 


1867 


1884 


82 


1868 


1885 


80 


1869 


1886 


77 


1870 


1887 


80 


1871 


1888 


1 10 


1872 


1889 


90 


1873 


1890 


90 


1874 


1891 


1 00 


1875 


1892 


80 


1876 


1893 


72 







You will observe that the prices of wheat in 1860, 1861, 1862 and 1863 were 
substantially the same as the prices from 1884 to 1891. Of course the prices 
from 1864 to 1872 are the inflated prices due to the effects of war, from which 
we did not recover fully till 1879. The prices of wheat and cotton since 1892 
have been abnormally depressed by the impairment of the consuming power of 
the people by causes that did not exist between 1879 and 1892. Wheat was 
higher in 1877, 1879, 1880, 1881, 1882, 1883, 1888 and 1891, after the so-called 
crime of 1873, than it was in any year from 1860 to 1863 or any year prior 
to 1848. 

It is noticeable also that the price of wheat is subject to great fluctuations, 
dependent on the supposed shortage or excess of supply in the whole world. 

Mr. Jones. Then, outside of wheat and cotton, which seem to have been 
exceptions to the rule for the reasons you have stated, farm products in recent 
years, up to 1892 at least, show no decline on the farm, the apparent decline 
in the great markets removed from the farm being mainly due to redaction 
of cost of transportation, which is a gain to the consumer and not a loss to 
the producer. 

Mr. Smith. That is the fact. Of course, if prices have been diminished 
by the material appreciation of gold, all prices would have beeu uniformly 
affected 



29 

COTTON AND WHEAT. 

Mr. Jones. I can iinclerstand why cotton has fallen because of the utiliza- 
tion of cotton seed and the enormous increase of production, although, ol 
course, it has not fallen so much as the agitators try to make out by taking 
the exceptionally big price during the reconstruction period. But why is it thai 
wheat has fallen, while corn has maintained its price? 

Mr. Smith. There are two reasons why wheat has fallen. First, it is the one 
agricultural product in whose' production new machinery and cultivation on 
a large scale have recently entered, and secondly, it has had within a few years 
the increased competition of the wheat fields of South America and India, de- 
veloped by the construction of railroads by the British Government. 

Mr. Vance. Yes; and it is largely because England can buy silver at a dis^ 
count and purchase as much wheat as ever in India with an ounce of silver thai 
we find Indian competition so destructive. 

' Mr. Smith. And you propose to overcome this by having the United States 
alone adopt the silver basis of India, so that England can buy wheat of oui 
farmers by paying them in depreciated silver instead of gold, as she now pays 
us. This is a remedy for low prices which England, from selfish considerations, 
would be glad to see us adopt. 

Mr. Burns. Is it not singular that England finds men who are shouting 
fiercely against her, ready to go in for a policy that will enable her to come the 
same silver scoop on our farmers that they say she is using on the India farm- 
ers? 

Mr. Smith. Before I pass from prices of farm products I want to give you 
figures of comparative prices of farm products in Maine in 1858 and 1892, fur- 
nished me by a Maine gentleman. It seems from these figures, which I will 
not stop to read, that the average prices of farm products in Maine (little wheat 
and no cotton being raised in that State) were 28 per cent, higher in 1892 than 
in 1858. The gentleman further informs me that this increase of average prices 
was mainly due to the increased introduction of manufacturing enterprises, 
which have furnished a home market for the products of the farm and saved the 
loss of cost of transportation. 

' Mr. Jones. I suggest that if our Western farmers would study such facts 
as these, and pay less attention to 16 to 1 silver schemers, we should find a 
practical remedy for hard times. 

Mr. Smith. It should be borne in mind that there was very little difference 
In the average price of wheat and cotton for fifteen years before 1860 and the 
fifteen years from 1878 to 1892, inclusive. Cotton was 10 2-5 cents per pound 
in the former period and 10 2-3 cents in the latter period. Cotton was only 5% 
cents in New York in April, 1843. Wheat in Chicago averaged 92 cents in the 
former period and 98 cents in the latter period. The average price of wheat 
In Chicago from 1840 to 1846 was only 67 cents. It is since 1891 that the ab- 
normally low prices of cotton and wheat have prevailed, and it is certain we 
shall have a higher range of prices as business recuperates. 

ABOUT WOOL AND WOOLEN GOODS. 

Mr. Vance. There is wool, which has declined 11 cents per pound within 
two years. How do you account for that except on the ground that gold, which 
measures its price, has appreciated? This is one of the articles to which Coin 
refers. 

J Mr. Smith. The world's price of wool is made by the great wool-producing 
countries of South America, Australia, and South Africa, whore land costs al- 
most nothing, labor is cheap, and the flocks do not have to be housed or fed. 
As their product has increased, produced at reduced cost, the world's price hai 
naturally declined. 



We impend a duty of 11 cents per pound on clothinff wool to protect ©ur 
farmers and encourage wool-growing here. The election of 1892 decided, 
among other things, that this duty should be abolished, and as soon as this be- 
came known the price began to fall in anticipation of the removal of duty, as 
woolen goods are made many months before they go into consumption. Thus 
even before the duty was actually removed in August, 1894, the price here 
had settled down Into a free-trade basis, and for this reason was 11 cents 
lower than before the election of 1892, and is now sold here at the world's 
price. 

I may mention the fact that wool in London is no lower now than in 1892, 
a fact which shows that, so far as the price of wool indicates, gold cannot 
have appreciated since that time on the basis of your own arguments. 

PRICES OF SILVER. 

Mr. Jones. I notice that the present silver agitation finds its support in the 
abnormal fall of prices in the past two years in consequence of the paralysis 
of industries cause<:l largely by the anticipation at first and subsequently the 
realization of disturbing tariff changes. By skillfully charging this exceptional 
dedine to "the crime of 1873" the agitators have made many unthinking per- 
sons believe that it is really so. 

Mr. Smith. That's so. Strange as it may seem, thousands have swallowed 
the charge that the so-called demonetization of silver in 1873 caused the ex- 
ceptional fall of prices in the past two years, without stopping to ask them- 
selves how it happened that there was so little fall in prices between 1873 and 
1892, when this cause was operating just the same as in the past two years. 
By general consent the most prosperous period of this country was between 
1879 and 1892. 

Mr. Burns. Here is a picture in "Coin" presenting a contrast between what 
he calls the prosperous "bimetallic" times of 1872 and the depression of the past 
two years. 

Mr. Smith. That's amusing, because in 1872-73 we had no "metallism" what- 
ever — not a dollar of either silver or gold in our currenc.v. 

Besides, "Coin" has so little regard for facts that he forgets that in 1872-73 
we were by no means so prosperous as we were from 1879 to 1892, during 
all of which time what he calls "the crime of 1873" was in force. 

' Mr. Vance. "Coin" says that an ounce of silver will buy as much of any- 
thing as ever, and that this shows that it is not silver that has declined, but 
gold that measures prices. 

Mr. Smith. If it were true that an ounce of silver would buy as much of 
anything as ever, that would only show that the cost of producing silver had 
declined the same as the cost of producing articles, and would simply prove 
that silver is not a stable measure. 

But it is not true, except as to articles whose cost of production has de- 
clined the same as silver. Except as to cotton and wheat (and only part of the 
time as to them) an ounce of silver will not buy as much corn, oats, pork, beef, 
or any other agricultural product as it would have done before 1860. It will 
buy more steel, kerosene, and other articles whose cost of production has de- 
clined 80 per cent., and less of all products whose cost of production has de- 
clined less than 50 per cent. 

Mr. Burns. I was reading a silver speech a few days ago in which it was 
said that silver would buy as much labor as ever in silver-basis countries like 
Mexico and India. 

Mr. Smith. Very likely that is so, for the reason that when the currency 
is depreciated wages are the last thing to rise. This is the reason that a 
depieciated currency always cheats labor first 



81 

WAGES AND CONDITION OF LABORERS IN MEXICO. 

Mr. Burns, I would like to ask you, Mr. Smith, if you have any information 
as to the general condition of agricultural and other laborers in any of these 
countries which are on a silver basis— Mexico, for instance, 

Mr. Smith. I have here a very interesting document which is called "Con- 
sular Report, No. 67," and published by the Department of State, at Washing- 
ton. In that I find a report by Consul-General Sutton which gives a carefully 
prepared statement, covering more than 45 pages, by Mexican officials from 21 
of the 27 States which compose the Mexican Republic. These replies were 
made in answer to a circular letter by the consul-general asking information as 
to— 

1. Wages of agricultural laborers. 

2. Conditions under which contracts for agricultural labor are made. 

3. Supply of laborers. * 

4. Principal agricultural products, production and prices. 

.5. Retail prices of principal articles of consumption, as meat, corn etc. 

6. Prices of meat cattle, horse stock, sheep and hogs. 

7. Private lands for sale, and prices. 

8. Possible industries that might be established. 

Fifty-five different officials, all of them evidently intelligent and careful stu- 
dents, answered these questions at full length and with great frankness. Here 
are extracts from some of them: 

In the State of Aguas Calientes field laborers receive for a day's work 12^ 
cents and 2 quarts of shelled corn. Prices of articles of prime necessity are: 
Corn, 40 cents to 80 cents per bushel; frijol (the bean of the country and the prin- 
cipal food), $1.60 to $3.20 per bushel. Wnat little beef they have sells for 16 
cents, mutton for 15 cents, hog meat for 14 cents per pound. 

In the State of Chiapas day laborers get 25 cents per day, with an almud 
(short peck) of shelled corn, the same of beans, and a ration of salt once a 
week. Laborers oy the month get $5 per month and the privilege of building a 
house and having a small bit of garden on the hacienda; 14 ounces of beef , 10 
ounces of pork, 5 ears of corn, 1 pound of beans, 8 ounces of rice and 10 
ounces of lard, sell at 26 cents each. 

WAGES LESS THAN FORTY CENTS A DAY. 

In the State of Coahulia, which borders upon Texas and produces a consider- 
able quantity of cotton, the wages are 37i/^ cents per day, paid in grain or goods, 
with no money and no allowances. In cotton-picking time most of them work by 
the tarea or quantity, and make from 50 cents to 65 cents per day. Meat sells 
at 12 V2 cents a pound, shelled corn at 5 cents and beans at 8 cents per quart, 
while flour is 8 cents and lard 31 cents per pound. 

In Durango the agricultural laborers get from $4 to $6 per month, with the 
weekly ration of 13 quarts of shelled corn. 

In Guanajuato the wages are from 18 cents to 19 cents a day, and this only 
for the days when the man is employed. 

In Hidalgo 18 to 22 cents per day, with an allowance of corn. Flour sells 
at 6 cents, meat at 10 cents, lard at 30 cents and Mexican brown sugar (pilon- 
cillo) at 6 cents per pound. 

In Jalisco, the monthly wages are $5, with 33 quarts of corn. 4 quarts of 
beans, and 3 ounces of salt every eight days. Day laborers get from 12i/> to 
IS^A cents, with 13 quarts of corn per week. Meat sells at 10 cents, bread at 
12 cents, sugar at 15 cents, and salt at 4 cents per pound. 

In the Federal district, where the City of Mexico is located, ngricultiirnl 
laborers get by the day 31 cents and no allowances, and the work is from 
A. M. to 6 P. M., with, one hour in the middle of the day. 



82 

In Miehooan, over on the Pacific Slope, and which produces sugar, wheat, 
corn, beans, fruit, and many other tropical crops, labor is 25 cents a day, by 
the day, and the hours from 6 A. M. to G P. M. Meat sells at 12 to 18 cents 
and lard at 25 cents per pound; beans 18 cents and corn at 6 cents per quart. 

In Nuevo Leon, in which is the great city of Monterey, wages are $4 to $8 
per month, with an almud of corn every eight days. 

Oaxaca, a Pacific Coast State, produces coffee, cocoa, sugar, tobacco, corn, 
beans and fruit. Wages are 25 cents a day, except in coffee harvest, when 
they are increased from 50 to 100 per cent. Monthly contracts are from $4 tc 
$7, with an allowance of corn for bread. 

Any person who wishes to make a more detailed study of this subject should 
write to the Department of State and get a full copy of this very interesting 
report. 

Mr. Burns. This free-silver 16-to-l feast is evidently one which working- 
men should avoid. 

"What we all understand, I think." said Vnnce, as he thought of the havoc 
made in the market by the "bears," "is that falling prices are very injurious to 
any country, and that they should be got rid of by the right kind of monetary 
legislation. Don't you look upon falling prices as a great evil?" 

Mr. Smith. That depends upon what causes falling prices. 

Falling prices that come naturally from labor-saving machinery and improve- 
ments m means of transportation are a blessing and to be sought after, while 
falling prices caused by a reduction of wages of labor or by sudden arrest of the 
industries through distrust of the future and the consequent diminution of the 
consuming power of the people, as we have had in the past two years, are a 
curse. 

Those who are trying to make the people believe that legislation in re- 
spect to silver in 1873 has caused the depression of business in the past two 
years ought to ask themselves how it happened that we had such unexampled 
prosperity between 1879 and 1802 under this very legislation. 

Mr. Jones. I think that we farmers have got the impression that prices have 
greatly fallen by having had our attention fastened on nothing but wheat and by 
the exceptionally low prices of everything the past two years. 

Mr. Smith. Undoubtedly. The 16 to 1 silver agitators have seized on the 
depression of business as a favorable time to "agitate. Thoy must hurry up 
their work, for they will soon be as dead as the Greenbackers were when busi- 
ness revived in 1879. When farmers see wheat and cotton rising, as they have 
already risen as business revives, they will not be long in discovering that sil- 
ver had nothing to do with the fall of prices, as it is having nothing to do with 
their rise. 

Mr. Jones. Before we pass from this question of prices, I want to inquire 
if you can give us any light on the course of prices between 1840 and 1800? 

Mr. Smith. I read to you a few minutes ago Labor Commissioner Wright's 
statistics as to general prices, from which it appeared that average prices de- 
clined 16% points between 1840 and 1860, and only 7% between 1860 and 
1892. So you will see that while the general trend of prices is downward with 
everything but hand labor farm products on account of labor-saving devices, 
and while the fall of prices of machine-made products has been greater in the 
past 20 years than ever before, because of increased inventions and severe 
competition that has reduced profits, yet average prices on the whole have fall- 
en no more since 1860 than before. 

RISE OF PRICES BY DEPRECIATING THE DOLLAR. 

Mr. Vance. Wouldn't the increase of priced that would come from a silver 
basis increase the prosperity of the country 2 



83 

Mr. Smith: Of course you would increase nominal prices by going to a silver 
basis and thus making 50 cents a dollar, just as measuring cloth with an 18-inch 
yardstick would give a greater number of such yards, but no more cloth. 

What advantage would it be to any one to call a half dollar a whole dollar and 
then proceed to adjust prices to the new clipped dollar? Of course it would raise 
the prices of what we have to buy, just the same as it would raise the price of 
what we have to sell. Nobody would gain anything by the change. It would take 
just the same number of bushels of any farm product to buy anything as before. 

The disadvantage would be, however, in the unsettling of prices and disturb- 
ance of trade at home, and in giving us a different money standard from that of 
our customers abroad, thus necessitating the payment of a new brokerage by 
every farmer on export products.^ And aside from all this there would be the dis- 
turbance and expense of a varying silver standard. 

Mr. Burns. What I should like to know is whether wages have not risen 
and rates of interest fallen since 1860, and even since 1879?* 

Mr. Jones. We all know that wages were 60 per cent, higher in 1892 than 
in 1860, and 10 per cent, higher in 1892 than in 1873, as stated by Commission- 
er Wright's tables, and that the rate of interest on loans in any part of this 
country was at least one-fourth lower in 1892 than in 1860, and even in 1873. 
These important prices, that of labor and that of use of borrowed capital, don't 
show an increase, which might be expected if gold, the measurer of wages and 
interest, had risen to any material extent. Daniel Webster once said that de- 
preciated money always cheated the workingman. 

Mr. Smith. That is sound reasoning, for wages and interest are a much 
surer test of the value of money than prices of products subject for the most 
part to the reduction of cost of production by labor-saving devices and methods. 



A SILVER BASIS AND DEBTS. 

Mr. Yance. The fact is, the strong reason for a silver basis is that it will 
relieve us from the great burden of debt which now oppresses the country— a 
debt which we believe has been doubled by the appreciation of gold under the 
gold basis. We object to gold because we believe whisn used alone as full 
redemption money it is constantly increasing in value. 

Mr. Smith. You have now undoubtedly struck the argument on which the 
free-silver 16 to 1 scheme wins the most of its support outside of the personal 
interest of silver-mine owners. It appears to be a plan to discharge debts for 
50 cents on the dollar, and this of itself is very taking in periods of business 
depression. 

Mr. Vance. But when debts have been doubled by the appreciation of gold, 
isn't it a fair thing to pay simply what was borrowed? 

Mr. Smith. I presume the supporters of the scheme to wipe out debts at 
50 cents on the dollar have persuaded themselves that they are really not tryiuj; 
to cheat their creditors; but did it ever occur to you that the money which all 
these debtors borrowed was equal in value to gold when borrowed, and that in 
the ordinary life of private debts there cannot have been much change in the 
value of the gold dollar? 

Mr. Jones. What is the average life of private debts? 

Mr. Smith. Less than a year, and even in the case of loans secured by 
mortgage only three years. It is doubtful if there are any considerable number 
of existing private debts ten years old, and but very few five years old. 

Mr. Jones. I think you said that even the rise of gold bet-sveen 1879 and 
1891 was not half of 1 per cent, per annum, and that since 1892 it is believed 
there had been no rise. Also that this rise between 1879 and 1801 was about 
the same as the fall of gold between 1850 and 1865. 



84 

Mr. Smith. That is believed to hare been the case. The change in tli§ 
value of gold in one year is eo small that it cannot materially affect deferred 
payments; and it is because it changes so little that by common consent in in- 
ternational trade, where no law can come in, gold is accepted as the standard 
of Talue. If there is in some periods a slight appreciation, in succeeding periods 
there is a corresponding decline. Unquestionably a period of decline of gold 
is already at hand. 

Mr. Burns. Is there the slightest evidence that gold appreciated 40 or 50 
per cent, between 1870 and 1892? 

Mr. Smith. Not the slightest. On the contrary, the small decline of aver- 
age prices from 1879, when we got back to specie payments and normal condi- 
tions, to 1892, just before the exceptional business depression set in which 
temporarily reduced prices abnormally, makes it impossible that the rise of gold 
could have been, in the thirteen years before 1892, 10 per cent, at the outside 
So that a debt contracted within three years has probably not appreciated a1 
all. 

Mr, Jones. And because of this it is proposed to depreciate the currencj 
50 per cent? 

Mr. Smith. That is the fact. It is worthy of note that it is claimed gold ap- 
preciates under our present so-called system, by which in this country we use sa 
much silver as gold as money; and it is proposed by the 16-to-l schemers tc 
remedy this by a plan that would eventuate in the use of only silver and drivt 
out our gold thus greatly contracting our currency. 

Mr. Yance. But does not the run on our Treasury reserve gold the pasi 
year show that there is not enough to go round? 

Mr. Smith. Even if that were the case we should only cause a bigger run or 
what we have by adopting the 16-to-l scheme, for we couldn't use silver dol- 
lars in settling foreign balances. TVe should have to use silver as bullion then 
just as we do now. The 16-to-l scheme would cause foreign investors to with- 
draw the capital they have here now. Indeed, it was distrust of our ability oi 
intention to pay our foreign debts in gold or its equivalent that caused the rur 
on our gold— a distrust which was made active by the failure to maintain our 
revenue equal to our expenditure — the failure to maintain our redemption fund. 

That the run on our Treasury was not caused by scarcity of gold abroad was 
clearly shown by the fact that the gold taken from us was simply accumulated 
and held as idle money in foreign commercial centres. 



DEBT PAYING IN WHEAT. 

Mr. Yance. But is it not true that, while a debt of $1000 contracted in 
1891 could have been paid with 1000 bushels of wheat, last winter it would 
have required 2000 bushels of wheat to pay it? 

Mr. Smith. But even suppose that was so — for I notice you select a year 
when the wheat crop was short and the price the highest and compare it with 
another year in an exceptional business depression, when the crop was large 
and the price the lowest — what does that have to do with the payment of a debt 
to be paid not in wheat but in money? 

Supposing wheat should be $1 next year, as it would be if the crop should 
be short, how would it then be with a debt of $1000 contracted in 1893, when 
wheat was 50 cents when the $1000 would have bought 2000 bushels? Would 
you contend that because of this fact the debtor should now give the creditor 
2000 bushels of wheat or its procaeds? Y«u skakd y@ur head. But why not, 
if your argument in the first case is sound? 



85 

Mr. Jones. Neither vleTV would be sound, because the money borrowed was 
not made payable in wheat, but in money. The man who loaned the money 
was not dealing in wheat futures. If he had been he would then have taken 
chances in the future of wheat. He simply lent money equivalent to gold at 
a low rate, without charging anything for the risk involved in the future price 
of any product 

Mr. Smith. Why do you not take corn, oats, pork, beef. lard, butter or some 
other farm product to illustrate the position of the borrower? Corn was higher 
in Chicago in 1892 than in any other year but one since 1S79. A debt con- 
tracted in 1879 for $1000 would have required 2225 bushels of corn to pay 
it, but in 1892 it would have been paid in 1800 bushels. Do you think the cred- 
itor in 1892 was entitled to have the 425 bushels of corn extra in 1892? 

Mr. Vance. No, I don't, 

Mr. Smith. I agree with you. But why not on your theory? 

Mr. Jones. Because it was a loan to be paid in money. And the same prin- 
ciple applies to Vance's wheat hypothesis. 

HOW IT AFFECTS THE FARMER. 

Mt. Vance. What I contend is that the value of the money has increased. 

Mr. Smith. And you propose to have the prices of wheat and cotton alone 
determine whether money has appreciated, when the price of other farm prod- 
ucts (if such an argument from prices is sound) would prove the reverse. 

Mr. Vance. But you must admit that the farmer who raises wheat does 
suffer in debt paying just as I have pointed out. 

Mr. Smith. But an intelligent farmer may be relied upon to raise crops 
that in the long run pay best. One particular crop, especially a crop like wheat, 
whose price depends on the world's yield, may not pay one year, for various 
exceptional reasons, and may pay largely another year. This is a good reason 
for diversification of farm products. No good farmer raises wheat exclusively, 
especially when he knows by experience that wheat ie an export product that goes 
up and down according to the favorable or unfavorable season, varying from 50 
cents to $1.34 in ChicagCH-$1.02 in 1876, 90 cents in 1878, $1.16 in 1881, 77 cents 
in 1886, and $1 in 1891. 

Mr. Burns. It seems to me that any attempt to measure money by wheat 
or cotton would give us a very uncertain standard of value. 

Mr. Smith. Of course it would. And yet the 16-to-l silver men are relying 
entirely on the price of wheat and cotton to prove that debts have appreciated. 

Mr. Jones. But in view of the fact that both wheat and cotton have risen 
considerably since the spring of 1895, they must conclude that both gold and 
debts have greatly depreciated within a few months. 

Mr. Smith. We must remember that all the talk about the advantage or 
disadvantage to the debtor of a depreciation or appreciation of the dollars is 
of little consequence, for the reason that eveiy new debt that is contracted 
will be made not on the basis of the former dollar but of the new depreciated 
dollar. It is a temporary advantage or disadvantage at the most, and not of 
the slightest consequence as compared with the value of confidence in the gicrantic 
daily exchanges. The change in the gold dollar in any one year is so slight as 
to not materially affect either creditors or debtors. The dollar should be so stable 
as to inspire confidence. But when the value of the dollar unit is suddenly 
and materially changed by legislation, uncertainty reigns and paralysis seizes 
upon business. 

DEBTS PAID WITH PRODUCTS. 

Mr. Vance. When it is considered that the private and public debts of the 
people of this country are forty thousand millions, 1 should like to know how 
anyone supposes we can pay with the mere pittance of six hundred millions of 
gold? 



86 

Mr. Smith. That is a wild guess, for I am not aware of any reliable statis- 
tics as to our private indebtedness. We simply know our public and corporate 
indebtedness, and that is but a fraction of the big sura you name. 

But whatever the sum may be, it is for value received. Every dollar for 
which we are indebted was borrowed in gold or its equivalent. More than that, 
it must be inferred that whatever has been borrowed has been in the main profi- 
tably used; so that the borrowing has made us richer. 

Mr. Vance. Our railroad bonds alone held abroad are a gigantic mortgage on 
the country. 

Mr. Smith. Practically the larger part of the railroad bonds held abroad 
represent the money which built the roads, and the holders of them are really 
owners of the roads. It is not expected that anything m.ore than the interest 
on the bonds will be paid, as this is in reality a dividend to the owners when the 
roads pay. And instead of being impoverished by the construction of these 
reads by foreign capital, we have been enriched. The debt is only in name. 

Mr. Vance. But must we not send gold to Europe to pay the annual interest, es- 
timated at two hundred millions, on these foreign investments or bonds? And 
where is it coming from if we can use only gold? We produce only thirty-five or 
forty millions of gold annually. 

Mr. Smith. We pay neither interest nor priacipal of our foreign or domestic in- 
debtodness in gold. We pay in exported products, and one of these products is 
silver. Last year we exported about $40,000,000 in silver. If silver had free coin- 
age here at 16 to 1 it could not go further in paying indebtedness or for pur- 
chases abroad than it does now. Gold is used only to settle the balance of trade, 

DEBT PAYING IN LABOR. 

Mr. Burns. We laborers have the idea that after all it is labor (harnessed to 
capital in the form of labor-saving appliances, etc.) which finally pays debts 
through the products of labor and capital; and that the vital question is wheth- 
er since 1873 (or perhaps 1879 would be a fairer basis of comparison) it would 
have required more labor in 1892 to pay a debt contracted in money in 1873 or in 
1879 than it would have required at the time the debt was contracted. 

~iMr. Smith. You are right in making the comparison on the basis of the wages 
of labor, for the reason that the true test ii not how many pounds or bushels oi 
any product, but how many days' labor it takes to produce the article used', tc 
make deferred paj^ments. The price of an article may be 25 per cent, less than 
a few years before, but if by reason of labor-saving devices it takes 33 per cent 
less labor to produce the articles, then of course the payment of the debt at the 
later period is easier than it would havebeen at the earlier period. Now, I find 
by Labor Commissioner Wright's tables that wages, estimated in gold, were 145 
points in 1873 and 160y2 in 1891, or I21/2 points higher in 1891 than in 1873. Ir 
other words, a debt of $1480 could have been paid with 10 per cent, less labor id 
1891 than in 1873 and with 15 per cent, less labor in 1891 than in 1879. 

Mr. Burns. This does not look much like an increase of the burden of a 
debt between 1873 and 1891. 

OUR FOREIGN DEBTS. 

Mr. Vance. But inasmuch as we are a debtor nation and England a cred- 
itor nation, I can see how it is England's advantage to make its debts as 
large as possible by holding onto the gold as the standard of value. But isn't 
it for our advantage to keep our debts down by paying silver as our standard? 

Mr. Smith. It is true that we have a country of immense natural resources 
awaiting development and therefore that we can and do profitably use foreign capi- 
tal, w^hile England is an old and finished country, with few natural resources 
that already are not developed, and hence has spare capital. This of course 
makes it for our interest to borrow in order to make more money. 



87 

Now, looking at this situation solely from the standpoint of otir own wel- 
fare, it is for our advantage to maintain our credit so as to be able to borrow 
at a low rate of interest. It is because we have maintained our credit and 
kept our money at par with gold that for years we have been able to borrow 
abroad at so low a rate of interest, while the silver-basis countries that have a 
demoralized currency have to pay higher interest and pay in gold, too. In 
other words, because we are borrowers it is for our interest to maintain all 
our currency equal to gold. Rest assured that if we should go to a silver 
basis we should have to pay dearly for it. England, if she looked at the mat- 
ter selfishly, would not object to having us cripple ourselves by going to a silver 
basis. 

I notice that China's new loan has been negotiated at 6 per cent., while 
ours has been negotiated on a basis about half that, 

THE WEST AND THE EAST. 

Mr. Vance. The West is overwhelmingly in debt to the East, and this in- 
debtedness is increased by the appreciation of money. The situation is well 
shown by an illustration in "Coin" of a cow generously fed by the West while 
the East gets all the milk. 

Mr. Jones. Is it not a little ungenerous, not to say unwise, to reproach 
the longer-settled East for having confidence enough in us to loan us money 
to develop the West, especially when we have been able to use the money so 
profitably? When the West is as old as the East we shall be far richer than 
the East now is and can return the favor. 

Mr. Smith. That is well said, Mr. Jones. As a matter of fact, even our 
own mortgages have been generally given for loans of money to pay for our 
farms, to buy new land, or to construct buildings and improve our facilities for 
making money. And instead of growing poorer, as "Coin" would have you be- 
lieve, the West has increased in wealth faster than even the East. I have 
here the census figures of the per cent, and per inhabitant increase of wealth of 
the different sections of country between 1880 and 1890, and let me read them: 
Per cent, and per inhabitant increase of wealth, 1880-1890. 





Increase Wealth. 
Per Cent. 


Increase Per 
Capita. 


North Atlantic Division 


21 

60 

200 

40 

70 


« 23 
197 


North Central Division ., 


Western Division , 


959 


iSouth Atlantic IJivision 


84 


South Central Division..... 


148 



Mr. Burns. That looks very much as if "Coin" ought to have turned his 
cow around and placed the head at the East and the milkers at the West. 

Mr. Jones. Of course, the fact is that we have been mutually benefited as 
parts of a common country. The fellow who will try to stir up prejudices and 
passions between different parts of our common country so as to accomplish 
his selfish ends is unpatriotic and reckless. 

Mr. Smith. The impression that the West is more deeply in debt than the 
rest of the country is a mistake. Take the State, county and muncipal debt 
of the West, and it is by no means as great as that of the East. According to 
the census of 1890 this debt, per capita, was $2G.S9 for New England, New 
York and Pennsylvania, and only $14.32 for the 12 central Western States, 
and $22.09 for the States west of the Mississppi. The similar debt of Great 
Britain is $87.79 per capita. 



88 

Mr. Jones. I think that I voice the sentiment of the West when I say 
that the desire to depreciate the dollar in order to pay debts easier is excep- 
tional. We are able to pay our debts and intend to do so. ^Tienever we can- 
not we will not ask that the currency be depreciated and business demora- 
lized to help us out, but will rely upon the insolvent laws which each State 
passes to relieve honest but unfortunate debtors. 

NO DISTINCT DEBTOR AND CREDITOR CLASSES. 

Mr. Smith. It is a great mistake to suppose that there is a large, exclu- 
sive, distinct debtor class. Most men are both debtors and creditors. The only 
class that are exclusively creditors is the workingmen. They . pay as they go, 
and their savings make the great mass of deposits in our savings banks. 

Bankers make loans to a very small extent of their own money. It is their 
business to loan the money of depositors. The workingmen of this country have 
over one thousand seven hundred and fifty-eight millions of deposits in savings 
banks and a considerable part of the three thousand millions of deposits in all 
other banks, nearly four thousand seven hundred millions of deposits in (all. It 
is these deposits that furnish the most of the loanable funds with which the busi- 
ness of the country is carried on. 

A scheme to depreciate our money by going to a silver basis would rob the 
workingmen of this country of nt least one thousand millions of dollars of their 
savings and would rob them far more than this of their wages. 

Mr. Burns. I want to say once for all that the workingmen of this country 
will drop this 16-to-l silver scheme like a hot potato just as soon as they examine 
it. 

DEPOSITS AND MONEY. 

Mr. Smith. Let me read to you the official statement of deposits in the 
various kinds of institutions: 

In national banks $1,779,295,862 

In State banks 648.573,800 

In loan and trust companies 411.650,000 

In savings banks 1,758,329,618 

In private banks 93,091,148 

Total ^ .?4.690,S90,433 

Mr. Yance. I do not understand how there can be four thousand seven 
hundred millions of deposits in banks to be loaned when there are only one 
thousand six hundred milliones of monev in the country. It seems to me that 
it would require four thousand seven hundred millions of money to make such 
deposits. 

Mr. Smith. You evidently have the misconception of the office of money that 
Coin has when he talks about the impossibility of paying five thousand mil- 
lions of debt with one thousand six hundred millions of currency. Money is 
simply a common medium or tool of exchange, but the real wealth exchanged 
is products. A thousand dollars in money may perform a dozen thousand-dollar 
exchanges of property or pay a dozen thousand-dollar debts in a single day. The 
name "currency" means something that runs or circulates from hand to hand. 
So the money that a workingman deposits to-day is loaned, perhaps, before 
night, to the manufacturer, who pays it out again to his workingmen to-mor- 
row, when it can be again deposited and reloaned, and so on. 

You will see at once that the volume of money or number of tools of ex- 
change required depends very largely upon the facilities for expediting ex- 
changes. Bank checks, bills of exchange, etc., offer substitutes for money 
more convenient than money itself, and, what is more, have precisely the same 



39 

effect on prices that coin or any otlipr kind of money -woiilcl have. Ninoty-two 
per cent, of all exchangres are maue by means of substitutes for money, and 
only 6 per cent, with money. 

No one is wise enough to determine beforehand just how much money our coun- 
try needs. That can be determined only by business demands. A supply of 
more than is required lies idle, and there is a loss of interest. More is required 
at some seasons than at others. The Government, for example, has coined $75,- 
000,000 in half and quarter dollars and dimes, but it is found impossible to 
keep much more than $60,000,000 in circulation. When more is paid out it re- 
turns. 

STABILITY AND UNIFORMITY OF STANDARD OF VALUE. 

Mr. Vance. While I can see now that it is impossible for us to get away 
from the world's standard of value (gold) in international trade, which is 
only 4 per cent of our entire trade, yet it seems to me that in our domestic trade, 
which is 96 per cent, of our aggregate- trade, we could adopt a silver basis 
with positive advantage. 

Mr. Smith. Does it not occur to you that there would be great confusion, 
friction and unnecessary expense in having one standard of value (gold) for 
our foreign trade and another standard (silver) for our domestic trade? 

All our imports, for example, are sold in our domestic markets. If they 
are bought on one standard and sold on another, there is increased expense 
and risk to be charged to our consumers, especially if our standard is more 
variable than the world's standard. 

Again, all our exports would be bought here on one standard and sold 
abroad on another. And rest assured the producers of farm products would 
have to pay the brokerage incident to different standards of value. 

Not only that, but the fact that silver is a fluctuating metal would bring 
a new element of risk in the fluctuations of exchange, which we would have to 
pay for. 

Mr. Jones. Inasmuch as prices are really made in the world's markets on 
■a gold basis, would not the fluctuations of silver make more changeable and 
uncertain prices in our domestic trade than we have now, and thus introduce 
a new gambling element into our trade which would work us serious injury? 

Mr. Smith. Certainly. The currency of any country is the life-blood of its 
commercial existence, and the fluctuating character of a currency on a silver 
basis would work serious evils. The greatest possible stability and the greatest 
possible uniformity of the standard of value in the leading commercial nations 
is a necessity. Any country which does not keep in touch with the commer- 
cial world as to its standard of value will be surely distanced in its foreign 
trade and seriously injured in its domestic trade. 

It must be remembered that in these days of steam and electricity the 
whole world is one in a very important respect. There now can be no surplus 
of money or merchandise anywhere in the world that it is not hurried to fill 
the shortage. The facility of transfer tends to equalize values and prices 
throughout the world except so far as tariffs differ. We know every evening 
what has been going on in every part of the world during the day — the condi- 
tion of the crops, where there is a surplus and where there is a shortage: and 
in every great market supply and demand meet and the adjusment of prices takes 
place, and the universal language in which these prices are expressed is grains 
of gold. 

EXTENT OF DOMESTIC TRADE. 

Mr. Burns. Do you remember the extent of our domestic trade? 

Mr. Smith. I remember that the transactions through our national banks 
alone reach one hundred and twenty thounnd millions per annum— more than 
two thousand three hunderd millions per iveek, four hundred millions every 



40 

secular day, and forty millions every business hour, in all of vrhich th e value 
of the practical standard dollar is the controlling element. 

Not a bushel of corn or wheat, not a pound of hay or cotton, not a yard of 
cloth, not a day's work, is sold or bought into which this value does not enter. 
Surely legislation which proposes to suddenly disturb this value to the extent 
of 50 per cent., and especially to give ns a fluctuating standard whose value 
is subject to the same changes as wheat, or cotton, or oil, a standard of meas- 
ure whose own value must be first estimated, should be advocated with bated 
breath. 

Mr. Vance. But won't the fact that the depreciation of silver would give 
us rising prices be of itself a stimulator of trade and prosperity? 

Mr. Smith. We have the experience of past schemes to depreciate the cur- 
rency to guide ns. While temporarily the speculative spirit is stimulated, yet 
the final result has been to demoralize, disturb, and finally wreck all business 
enterprises and plunge the country into despair whenever the currency has been 
depreciated in peace. A forced depreciation of the currency in war is tided 
over as long as the war lasts because of war expenditures, but after that the 
penalty must be paid. Depreciation and demoralization of the currency has the 
same effect on national life that excessive drinking does upon the individual 
life; first the delusions of the initial stages of intoxication, then the debauch, the 
delirium and the terrible penalties of the violation of eternal laws. 

Commercial prosperity can exist only under permanent and settled condi- 
tions, at least so nearly permanent that annual changes are reduced to a min- 
imum. By the consensus of all leading commercial nations, grains of gold give 
the greatest permanency as a standard of value; and while silver is to be used 
with gold, yet it can be used successfully only under conditions that make the 
silver dollar equal in value to the gold dollar and maintained at a parity with 
it. 

Nothing promotes distrust, paralyzes trade, discourages investments, closes 
avenues of employment, and diminishes wages so effectually as a demoralized 
and depreciating currency. 

Mr. Jones. You are right. And hence nothing is clearer than that it is 
the duty of every good citizen to resist the attempt to have this country adopt 
alone the free and unlimited coinage of silver at the ratio of 16 to 1, for this 
means silver monometallism, a silver basis, a depreciated currency, a brief 
period of intoxication, and then demoralization, business and industrial paralysis, 
a financial panic and destruction. , 

"Let the light of experience, shining in the tower of history and warning th.e 
present generation of the dangers of the yawning abyss into which a depreciate 
currency has repeatedly plunged nations, guide the destinies of the Republic 



Carlisle on the Ratio of 16 to 1 



SPEECH 



OF 



Hon. John G. Carlisle 



BEFORE THE 



WORKINGMEN OF CHICAGO 



APRIL 15, 1896 



Printed as Senate Document No. 256 

on the 

Motion of Senator Vilas, of Wisconsin 
May 14, 1896 

WASHINGTON, D. C. 



MR. VILAS PRESENTED THE FOLLOWINa 

SPEECH 

of 

Hon. John Q. Carlisle 

before the 

WORKINQMEN OF CHICAGO 
April 15, 1896 



MR. PRESIDENT AND GENTLEMEN : I am here this evening in re- 
sponse to a communication received several months ago from a number of 
gentlemen connected with various labor organizations of this city, inviting 
me to address them and their fellow-workmen upon the currency and fi- 
nancial questions, which were then and are still agitating the minds of our 
people in all parts of the country. When that communication reached me, 
it was not in my power to designate a time when my official duties would 
permit me to come here, but I promised to hold the matter under consider- 
ation and come whenever it might be possible to do so, and I now congrat- 
ulate myself upon mj^ good fortune in having at last found an opportunity 
to meet this great assemblage of laboring people and to discuss in their pres- 
ence what I consider one of the most important economic questions that can 
possibly engage the attention of wage earners in this or any other country. 

WHETHER THE GENERAL BUSINESS OF THE PEOPLE SHALL 
BE TRANSACTED WITH GOOD MONEY OR BAD MONEY, 
WHETHER THE WAGES OF LABOR SHALL BE PAID IN 
A SOUND AND STABLE CURRENCY, WITH FULL PURCHAS- 
ING POWER IN THE MARKETS WHERE THEY ARE EX- 
'CHANGED FOR THE NECESSARIES OF LIFE, OR IN A DE- 
PRECIATED AND FLUCTUATING CURRENCY, HAVING NO FIXED 
VALUE AND THEREFORE BEARING NO PERMANEiNT RELATION 
TO THE CURRENT PRICES OP COMMODITIES, ARE QUESTIONS 
WHICH AFFECT THE COMFORT AND HAPPINESS OF EVERY HOME 
AND THE PEACE AND PROSPERITY OF EVERY COMMUNITY. While 
all are deeply Interested in the settlement of these questions, it is 
unfortunately the case that all will not be equally affected by an erroneous 
decision upon them. 

THE POOR MAN BEARS THE BURDEN. 

The wealthy m.an, the man who has accumulated property or hoarded 
money, is always exempt from many of the most serious consequences of a 
financial or industrial disturbance. He has both means and credit, and 
while he may be subjected to much It^ss and inconvenience neither he nor 
his family will be pinched by hunger or compelled to go without raiment 
or shelter. IT IS THE POOR MAN AND THE MAN OF MODERATE 
MEANS, THE MAN WHO HAS NOT BEEN FORTUNATE ENOUGH TO 
ACCUMULATE PROPERTY OR MONEY, BUT WHO DEPENDS UPON 
HIS WAGES OR UPON THE PRODUCTS OF HIS OWN LABOR FOR 
THE MEANS OF SUPPORTING HIMSELF AND HIS FAMILY. THAT AL- 
WAYS FEELS THE FIRST AND MOST DISASTROUS EFFECTS OF 



A BUSINESS OR INDUSTRIAL DEPRESSION.NO MATTER WHETHER 
IT RESULTS FROM A DEPRECIATED AND FLUCTUATING CUR- 
RENCY OR FROM OTHER CAUSES. Such a man has nothing to dispose 
of but his labor, and nothing with which to support himself or his family 
but his wages or the proceeds of his own labor, and any policy that even 
temporarily suspends or obstructs the industrial progress of the country 
by diminishing the demand for the products of labor, or by impairing the 
capacity or disposition of capital to employ labor, must be Injurious to 
his interests and inflict more or less suffering upon all who are dependent 
upon him. LABOR CAN NOT BE HOARDED; THE IDLE DAY IS GONE 
FOREVER; LOST WAGES ARE NEVER REIMBURSED; AND THERE- 
FORE STEADY EMPLOYMENT AND GOOD PAY IN GOOD MONEY 
ARE ESSENTIAL TO THE COMFORT AND HAPPINESS OF THE 
AMERICAN LABORER AND HIS WIFE AND CHILDREN, AND HE 
WILL BE UNFAITHFUL TO HIMSELF AND TO THEM IF HE DOES 
NOT INSIST UPON THE ADOPTION AND MAINTENANCE OF SUCH 
A POLICY AS WILL MOST CERTAINLY PRESERVE THE VALUE 
AND STABILITY OF ALL OUR CURRENCY AND PROMOTE THE 
RjEGULAR AND PROFITABLE CONDUCT OF ALL OUR INDUS- 
TRIAL ENTERPRISES. He can not prosper when the country is in dis- 
tress, when its industries are prostrated, its commerce paralyzed, its 
credit broken down, or its social order disturbed; NOR CAN HE PROS- 
PER WHEN THE FLUCTUATIONS OF THE CURRENCY ARE SUCH 
THAT HE CAN NOT CERTAINLY KNOW THE VALUE OF THE DOL- 
LAR IN WHICH HIS WAGES ARE PAID, or estimate in advance the 
cost of the necessaries of life. 

THE FREE COINAGE PR0P05ITI0N. 

Whether we shall or shall not have a long period of financial, commer- 
cial and industrial disturbance in this country, and whether labor shall 
be deprived of permanent employment or be partially employed and in- 
adequately paid, are questions directly and necessarily involved in the de- 
mand now seriously made by many of our fellow citizens that the United 
States, without the co-operation of any other government in the world, and 
in opposition to the established policy of every other great civilized and 
commercial nation, shall authorize the free and unlimited coinage of full 
legal tender silver at the ratio of IG to 1, notwithstanding the true market 
ratio between the two metals is about 31 to 1; or, in other words, that the 
United States alone shall declare by law that 16 ounces of silver are equal 
in value to 1 ounce of gold, when IT IS AN INDISPUTABLE FACT 
EVERYWHERE RECOGNIZED THAT IN ALL THE MARKETS OF THE 
WORLD, IN SILVER STANDARD COUNTRIES AS WELL AS IN GOLD 
STANDARD COUNTRIES, 16 OUNCES OF SILVER ARE WORTH ONLY 
ABOUT ONE-HALF AS MUCH AS ONE OUNCE OF GOLD AND WILL 
PURCHASE ONLY ABOUT ONE-HALF AS MUCH OF THE NECES- 
SARIES OF LIFE. 

THE NAKED PROPOSITION. 

The naked proposition is that the United States shall coin, at the public 
expense, for the exclusive benefit of the individuals and corporations own- 
ing the bullion, all the silver that may be presented at the mints into 
dollars containing 371^4 grains of pure silver, or 412l^ grains of standard 
silver, worth intrinsically about 51 or 52 cents, deliver the coins to the de- 
positors of the bullion, and compel all the other people in the country to 
receive these coins at the valuation of 100 cents each in the payment of 
debts due them for property sold: for labor and service of all kinds; for 



pensions to soldiers and sailors and their widows sind children; for losses 
sustained under policies issued by- life and other insurance companies; for 
deposits in savings banks, trust companies, building associations, and other 
institutions; for debts due to widows and orphans by guardians, executors 
and administrators of decedents' estates and other trustees; for salaries of 
all civil, military and naval ofRcials, and the compensation of private sol- 
diers and seamen, and, in short, for every kind of obligation recognized by 
the laws of the land, except only in cases where the prudent capitalist 
has taken the precaution in advance to contract for payment of debts 
due to him in gold or its equivalent. To say nothing of the gross par- 
tiality and manifest injustice of such a policy, ITS IMMEDIATE EF- 
FECT WOULD BE TO CONTRACT OUR CURRENCY TO THE EX- 
TENT OF ABOUT $620,000,000 BY STOPPING THE USE OF GOLD AS 
MONEY AND PUTTING A PREMIUM UPON THE COINS OF THAT 
METAL EQUAL, OR ABOUT EQUAL, TO THE DIFFERENCE BE- 
TWEEN THE INTRINSIC VALUE OF THE GOLD DOLLAR AND THE 
INTRINSIC VALUE OF THE SILVER DOLLAR. Gold coins would at 
once become a commodity and would be bought and sold by speculators 
in the market just as they were during the war, when we had a depre- 
ciated paper currency. 

BULLION BROKERS WOULD GET A LARGE PROFIT. 

The value of the silver dollar would fluctuate from day to day, moving 
up and down with the rise and fall of the commercial price of the bullion 
contained in it, as the Mexican dollar does now, and the premium on the 
gold dollar v/ould of course fluctuate to the same extent, thus affording 
an opportunity to bullion brokers and speculators to buy and sell it at a 
profit. It v/ould cease to be used as money, because no man would pay 
his debt in gold dollars, or in paper redeemable in gold dollars, worth 100 
cents, when the law permitted him to pay it in silver dollars worth only 
51 or 52 cents each. The sudden withdrawal of $620,000,000 from the 
volume of currency in the country would undoubtedly produce a financial 
and industrial disturbance far more disastrous to the interests of labor 
than has ever been experienced in our history, and NO MAN WHO HAS 
A PARTICLE OF SYMPATHY FOR WORKINGMEN AND WOMEN AND 
THEIR DEPENDENT FAMILIES CAN CONTEMPLATE THE POSSI- 
BILITY OF SUCH A CALAMITY WITHOUT FEELING THAT IT IS HIS 
DUTY, V/HETHER HE OCCUPIES A PUBLIC OR A PRIVATE STA- 
TION, TO EMPLOY EVERY HONORABLE MEANS AT HIS COMMAND 
TO AVERT IT. 

While the sudden expulsion of $620,000,000 in gold from our stock of 
money would itself be sufficient to create a financial disturbance unpar- 
alleled in the history of this or any other country, the situation would 
be very greatly aggravated by the fact that the purchasing power of all 
the remainder of our currency would be suddenly reduced about one-half; 
WE SHOULD HAVE ONLY ABOUT TWO-THIRDS AS MUCH CUR- 
RENCY AS WE HAVE NOW, AND AT THE SAME TIME IT WOULD 
BE SO DEPRECIATED IN VALUE THAT IT WOULD REQUIRE ABOUT 
TWICE AS MUCH AS WE HAVE NOW TO TRANSACT THE BUSINESS 
OF THE COUNTRY, PROVIDED THERE SHOULD BE ANY BUSINESS 
TO TRANSACT. 

OUR EXPERIENCE WITH THE RATIO. 

The attempt to maintain what is called the double standard of value, 
that is, the attempt to keep the legal-tender coins of the two metals, 
g-old and silver, in use as money at the same time, upon a ratio ot vftlu« 



fixed by law, has repeatedly been made by kings and parliaments In ev- 
ery civilized country In the world, and it has failed again and again in 
every one of them; and it requires no gift of prophecy to foresee that it 
must continue to fail so long as self-interest constitutes a controlling fac- 
tor in the busmess affairs of men. Without trespassing upon your patience 
to review the monetary history of other countries in which this experiment 
has been made and failed, it may be advantageou? to refer briefly to our 
own experience upon this subject. When it was determined to adopt a mon- 
etary system for the United States and establish a mint, Alexander Hamilton 
and Thomas Jefferson, two men who differed widely upon almost every 
public question, and whose names as founders and leaders of their re- 
spective parties will live as long as our political literature is read, agreed 
that in determining what should be the coinage or legal ratio between gold 
and silver, the true relative commercial value of the two metals in the 
markets of the world must first be ascertained, and that this relative value 
when ascertained should be incorporated into the statute as the basis of 
the proposed system of coinage. Although they were party leaders they 
were statesmen and patriots, and when they were called on to consider 
this great business question, affecting all the private affairs of their fel- 
low citizens, they gave it a thorough and impartial investigation upon its 
merits, without regard to the effect their decision might have upon their 
own political fortunes or upon the political fortunes of their followers. 

STATUTES DO NOT AFFECT METALLIC VALUES. 

THESE GREAT MEN WERE NEVER DISTURBED FOR A MO- 
MENT BY THE DELUSION THAT CONGRESS COULD FIX BY STAT- 
UTE THE ACTUAL OR RELATIVE VALUES OF GOLD AND SILVER 
ANY MORE THAN IT COULD FIX BY STATUTE THE ACTUAL OR 
RELATIVE VALUES OF A POUND OF LEAD AND A POUND OF 
IRON. They knew that gold and silver, like other exchangeable things, 
are commodities, and that their value will be fixed in the markets of the 
world. They knew that it was entirely competent, in fact necessary, for 
Congress to declare the ratio upon which the two metals should be coined 
at the mint, if they were to be coined at all, but they knew equally well 
that if the ratio so declared did not correspond substantially with the ra- 
tio which the commercial world had established the coins of the two metals 
could not be kept in use as money at the same time, and consequently, as 
I have already said, they determined to ascertain the commercial ratio 
and to adopt it. They reached the conclusion that the true commercial ra- 
tio at tkat time was 15 to 1 — that is, that 15 ounces of silver were equal 
in value to 1 ounce of gold — and accordingly the act of 1792, which was 
our first coinage law, authorized the coinage of the two metals at that 
ratio. 

GOLD DRIVEN OUT OF CIRCULATION. 

At the ratio thus established the silver dollar contained 371^ grains 
of fine silver, and the gold dollar contained 24% grains of fine gold; but it 
was soon discovered that a mistake had beew made, and that 371^ grains 
of fine silver were not in fact equal in value to 24% grains of fine gold, and 
the consequence was that, although the difference between the value of a 
silver dollar and the value of a gold dollar was only about 1 cent and 
one-eighth of a cent, silver drove gold out of use and out of the country, 
and from that time we had silver monometallism until after the passage 
of the actg of 1834 and 1837. The fact that the silver was put into the 
form of a coin and made legal tender the sam.e as gold, and that both 
dollars were declared to be worth 100 cents each, did not Increase the 
value of the 3711/4 grains of silver to any extent whatever, THE PEOPLE 



COULD NOT BE DECEIVED BY MERE WORDS PRINTED IN A STAT- 
UTE; THEY SOON LEARNED THAT THE METAL CONTAINED IN 
THE SILVER DOLLAR WAS NOT EQUAL IN VALUE TO THE METAL 
CONTAINED IN THE GOLD DOLLAR, AND THEY PAID SILVER TO 
THEIR CREDITORS AND HOARDED THE GOLD OR SENT IT OUT OF 
THE COUNTRY. Even our new and rull-weight silver coins would not circu- 
late or remain in the country, occause Congress by various acts made certain 
foreign coins legal tender in the payment of debts, and as they were gen- 
erally so worn by abrasion as to be of less weight than the new domestic 
coins, they drove our dollars and half dollars and to a large extent our 
quarters and dimes also, out of use as money. Our own coins were ex- 
ported and used at their bullion value in making purchases and paying 
debts abroad, and MR. JEFFERSON HIMSELF, WHO HAD THEN BE- 
COME PRESIDENT OF THE UNITED STATES, ISSUED AN ORDER 
ON THE 1ST DAY OF MAY, 1806, STOPPING THE COINAGE OF SIL- 
VER DOLLARS AT OUR MINTS. No more silver dollars were coined until 
1836, thirty years afterwards, and then only 1000 of them were issued 
from the mints. 

SILVER DRIVEN OUT OF CIRCULATION. 

Gold having left the country, Congress, in 1834, during the Adminis- 
tration of Andrew Jackson, determined to restore it to the circulation, and, 
in order to accomplish that result, the legal ratio was changed from 15 
to 1 to about 16 to 1; that is, the law was so amended as to provide that 
the gold eagle or $10 piece should contain 232 grains of pure gold, which 
made the dollar consist of 23 1-5 grains, but by the act of 1837 it was 
changed to 23.22 grains, which now constitutes the dollar and unit of val- 
ue. This was a slight overvaluation of gold in the coinage, because 23.22 
grains of fine gold were not in fact worth as much in the markets as 
3711/4 grains of fine silver. Although the difference in value was very 
small, it proved sufficient to change the whole character of our -metallic 
currency, and under this ratio gold and silver exchanged places; silver went 
out of the country and gold came in, and from that time until after the 
passage of the act of 1878 we had practical gold monometallism, except 
during the period of the war, when we had no metallic money of any 
kind. When the great civil war began we had no silver in circulation, 
except the subsidiary coins authorized by the act of 1853, but we had 
gold and paper redeemable in gold, and it was not' long before we had 
another practical illustration of the natural law that the inferior or less 
valuable legal-tender currency will expel the superior or more valuable 
legal-tender currency from circulation. Early in 1862 Congress most wise- 
ly, in my opinion, authorized the issue of legal-tender paper to circulate 
as money, and the usual and inevitable result followed. Gold ceased to be 
used as money, and the banks and the^ Treasury having suspended 
specie payments, the country was flooded with depreciated currency worth 
at times less than 50 cents on the dollar. Later on, fractional paper cur- 
rency was authorized by Congress, and the effect of this was to drive out 
of circulation even the light-weight subsidiary silver coins, and for many 
years not a single piece of metallic money of any kind was used by the 
people, except on the Pacific Coast, where gold continued to circulate at 
its actual instrinsic value, without regard to the fictitious value which the 
acts of Congress attributed to the legal-tender paper. 

SILVER COINAGE WOULD CONTRACT THE CURRENCY. 

I will endeavor to show you hereafter what effect this depreciated 
currency had upon the wages of labor and upon the prices of commoditiea 



which the laborers were compelled to purchase with their wages, my pur- 
pose at the present moment being simply to prove, by our own experience, 
that it is impossible to retain in circulation at the same time legal-tender 
gold and silver coins of the same denomination at any ratio which does not 
correspond with the actual commercial values of the two metals in the 
markets of the world, and that therefore THE FREE AND UNLIMITED 
COINAGE OF LEGAL-TENDER SILVER BY THE UNITED STATES 
ALONE AT THE RATIO OF 16 TO 1, WHEN THE TRUE COMMER- 
CIAL RATIO IS ABOUT 31 TO 1, WOULD INSTANTLY CONTRACT 
THE CURRENCY BY THE EXPULSION OF ALL THE GOLD NOW IN 
THE COUNTRY. If the overvaluation of silver to the amount of a little 
over 1 per cent in the coinage law of 1792 expelled gold and established 
silver monometallism, and if the overvaluation of gold to the extent of 
less than 1 per cent in the acts of 1834 and 1837 expelled silver from circu- 
lation and established gold monometallism, is not the conclusion irresist- 
ible that the free and unlimited coinage of LEGAL-TENDER SILVER 
AT THE PRESENT TIME, AT AN OVER-VALUATION OF NEARLY 100 
PER CENT. WOULD AT ONCE PLACE THE COUNTRY UPON A 
MONOMETALLIC SILVER BASIS? This question does not seem to me to 
be open to serious argument, and when it is proposed that the United 
States shall, in defiance of our own experience during a period of eighty- 
nine years, authorize the free coinage of legal-tender silver at 
such a ratio IT IS THE DUTY OF THE PEOPLE, AND ES- 
PECIALLY THE DUTY OF THE LABORING PEOPLE, TO 
PAUSE BEFORE IT IS TOO LATE AND CAREFULLY CONSIDER 
WHETHER THEY WILL DETERMINE TO OVERTHROW THEIR EX- 
ISTING MONETARY SYSTEM AND SUBSTITUTE IN ITS PLACE THE 
DEPRECIATED SILVER MONOMETALLISM OF ASIA AND MEXICO 
AND THE SMALL STATES AND REPUBLICS OF CENTRAL AND 
SOUTH AMERICA, WITH THEIR LOW RATES OP WAGES AND 
THEIR HIGH RATES OF EXCHANGE. Under the coinage act of 1792 
we had silver, but no gold, and under the acts of 1834 and 1837, with the 
free coinage of both metals, we had gold but no silver, except the token 
subsidiary coins after 1853, while NOW, WITH GOLD AS THE STAND- 
ARD AND THE LIMITED COINAGE OF SILVER, WE HAVE BOTH 
GOLD AND SILVER AS FULL LEGAL-TENDER MONEY IN LARGER 
AMOUNTS THAN EVER BEFORE IN OUR HISTORY, and the coins of 
the two metals are kept equal in purchasing power by the credit and re- 
sources of the Government, notwithstanding the difference in their in* 
trinsic value. 

SHALL WE USE BOTH HETALS? 

We have now about $620,000,000 in gold and $413,000,000 in full legal- 
tender silver, besides $78,216,677 in subsidiary silver coins, which are legal 
tender in payments not exceeding $10, and the real question for the public 
to decide is whether they will continue to use the coins of both metals or 
adopt a monetary system which always has and always will drive one of 
them out of the country. I am not here, therefore, this evening to advo- 
cate the exclusive use of gold coin as money or to oppose a conservative 
and safe use of silver coin as money along with gold and at a parity 
with gold, but I am here to insist that we shall not abandon the present le- 
gal standard of value, expel all the gold from the country, and adopt silver 
monometallism, with free coinage of a nominal dollar worth intrinsically 
only 51 or 52 cents. I AM HERE TO INSIST THAT THE MINTS OF 
THE UNITED STATES WHICH WERE CONSTRUCTED AND 
ARE MAINTAINED AND OPERATED AT THE FXPENSE OF ALL 

S 



THE PEOPLE, SHALL NOT BE USED FOR THE EXCLUSIVE BENE- 
FIT OF THE OWNERS OF SILVER BULLION UNDER A LAW GIV- 
ING THEM THE RIGHT TO HAVE 51 or 52 CENTS' WORTH OF 
THEIR SILVER COINED FREE OF CHARGE AND STAMPED AS A 
DOLLAR, AND COMPELLING YOU AND ALL OTHERS TO RECEIVE 
IT FROM THEM AS A DOLLAR. 

MINTS COULD NOT COIN THE HOME PRODUCTION. 

All the Mints of the United States, operated to their full capacity and 
doing no other work, could not coin into standard silver dollars two-thirds 
of the annual production of silver in our own country, but notwithstand- 
ing this, it is seriously proposed to offer free coinage to all the silver in 
the world at a legal valuation almost double its commercial value in the 
markets of the foreign countries where it is produced. The annual produc- 
tion of silver in the world is about $216,000,000 at our coining rate, and the 
annual capacity of our Mints to coin standard silver dollars is only about 
$40,000,000. Last year we coined $43,933,475 in gold and $9,069,480 in sil- 
ver; so that IF OUR MINTS WERE DEVOTED EXCLUSIVELY TO 
THE FREE COINAGE OF STANDARD SILVER DOLLARS THE ADDI- 
TION TO OUR STOCK OF METALLIC MONEY WOULD BE ABOUT 
$15,000,000 LESS EVERY YEAR THAN IT IS NOW, AND IT WOULD 
NOT BE GOOD MONEY AFTER IT WAS COINED. MORE THAN FIF- 
TEEN YEARS WOULD ELAPSE BEFORE WE COULD AT THIS RATE 
COIN ENOUGH DEPRECIATED SILVER DOLLARS TO SUPPLY THE 
PLACE OF THE GOOD GOLD DOLLARS EXPELLED FPOM THE 
COUNTRY. AND IN THE MEANTIME A COMPLETE REVOLUTION 
WOULD HAVE TO BE EFFECTED IN OUR COMMERCIAL RELATIONS 
WITH OTHER NATIONS, AND IN ALL OUR DOMESTIC BUSINESS AF- 
FAIRS, INCLUDING A READJUSTMENT OF THE WAGES OF LABOR, 
THE PRICES OF COMMODITIES, the rates of municipal. State, and 
Federal taxation, charges for transportation, and every other matter in- 
volving the use of money or credit. We should descend by a single step 
from the highest standard of value to silver monometallism, with a con- 
tracted and at the same time a depreciated currency, a financial experi- 
ment which has no precedent in the monetary history of the world. Fortu- 
nately, when changes have heretofore been made in the circulation by the 
substitution of the coins of one metal for the coins of the other, the differ- 
ence in their value has been very small and the process of substitution has 
been gradual and created no great financial disturbance. 

RESULTS OF THE ACT OF 1792. 

UNDER THE ACT OF 1792 THE DIFFERENCE IN VALUE BE- 
TWEEN THE COINS AT THE LEGAL RATIO WAS ONLY A LITTLE 
OVER 1 PER CENT, AND YET, WITHIN LESS THAN ONE YEAR AF- 
TER THE ENACTMENT OF THAT STATUTE, CONGRESS WAS COM- 
PELLED TO REINFORCE OUR STOCK OF MONEY BY MAKING CER- 
TAIN FOREIGN COINS LEGAL TENDER IN PAYMENT OF DEBTS; 
and on the same day of the passage of the act of 1884, which put the coun- 
try on a gold basis by undervaluing silver about 1 per cent., Congress 
passed another statute making the gold coins of Great Britain, Portugal, 
Brazil, Prance, Mexico and Colombia legal tender by weight in the pay- 
ment of debts, thus providing as far as possible against a contraction of the 
currency on account of the expulsion of silver from the circulation. During 
the war, when gold was leaving the country, legal tender Treasury notes 
were rapidly issued, under the authority of Congress, to take its place, 
and. Instead of a contraction of the currency, we had an expansion. After 
the war. when it was determined to change the character of our currency 

9 



affain by thp resumptiori of spp'^ie payments, the law was enacted fouw" 
years in advance of tile time when. U was to take effect, in order that am- 
ple opportunity might be afforded^ to adjust the business of the people to 
the altered conditions. Now, however, all the conservative and pruden- 
tial considerations that have usually controlled in the settlement^f great 
financial questions se«:^m to be utterly disregarded, and WE ARE CON- 
FRONTED BY AN ORGANIZED AND AGGRESSIVE MOVEMENT TO 
DESTROY BY A SINGLE BLOW THE' MEASURE OF VALUE UPON 
WHICH ALL EXISTING CONTRACTS ARE BASED AND THUS SUB- 
VERT THE VERY FOUNDATIONS OF OUR MONETARY SYSTEM, 
WITHOUT ALLOWING A SINGLE DAY TO PREPARE FOR THE 
CHANGE. IN THE GENERAL CONFUSION AND DISORDER RE- 
SULTING FROM SUCH A RADICAL MEASURE, WHAT WILL BE THE 
CONDITION OF THE AMERICAN LABORER? Will he be benefited or 
injured by reducing the value of the money in which his wages are paid 
and at the same time increasing the price's of the commodities for which his 
wages are expended? 

DESTROYING THE VALUE OF WAGES. 

After struggling for more than a quarter of a century, through labor 
organizations and otherwise, to secure a rate of wages which would make 
the proceeds of a day's work equal to the cost of a day's subsistence for 
the workingman and his family, you are asked by the advocates of free coin- 
age to join them in destroying one-half the purchasing power of the 
money in which you are paid and impose upon yourselves the task of doub 
ling the nominal amount of your wages hereafter; that is, to struggle for 
another quarter of a century, or perhaps longer, to raise your wages in 
a depreciated currency to a point which will enable you to purchase with 
them as much of the necessaries of life as you can purchase now; .AND IF, 
AFTER YEARS OF CONTENTION, PRIVATION, AND INDUSTRIAL DIS- 
ORDER, YOU SHOULD AT LAST SUCCEED IN SO ADJUSTING WAGES 
THAT THEY WOULD PROCURE AT THE HIGHER PRICES OF COM- 
MODITIES JUST WHAT THEY WILL PROCURE NOW AT THE EX- 
ISTING PRICES, WHAT WOULD YOU HAVE GAINED BY THE 
CHANGE FROM THE OLD TO THE NEW CONDITIONS? Money re- 
ceived, for wages, like money received on every other account, is valuable 
only to the extent that it can be exchanged for other commodities, and it 
is scarcely necessary to suggest that a dollar worth 50 cents will not pur- 
chase as much in the markets as a dollar worth 100 cents. 

A NAME DOES NOT MAKE VALUES. 

TO CALL A DIME A DOLLAR, WOULD ADD NOTHING WHAT- 
EVER TO ITS INTRINSIC VALUE OR TO ITS PUR- 
CHASING POWER; IT WOULD STILL BUY ONLY A DIME'S 
WORTH OF GOODS. If these propositions are correct, it is clear that 
when wages are paid in a depreciated currency the rates of wages must 
be increased in proportion to the depreciation of the money and in pro- 
portion to the increase in the prices of other things, or the laborer will 
suffer a loss. Now, I affirm that it is the universal rule that the rates 
of wages do not increase in proportion to the depreciation in the value of 
the money in which they are paid, and that when the currency is depre- 
ciated the rates of wages do not increase in proportion to the increase 
in the prices of the commodities the laborer is compelled to purchase. 
If there has been a single exception to this rule in this or in any other 
country, my investigations have not enabled me to find it, and I do not 
believe one can be found. 

10 



AMERICAN LABOR'S EXPERIENCE WITH A DEPRECIATE 

CURRENCY. 

It Is not my purpose to weary you by the presentation of voluminous 
statistics or by a tedious recital of facts, but the particular proposition 
now under consideration is of such great importance in the discussion 
of this subject that you must permit me to call your especial attention 
to THE EXPERIENCE OF THE LJbBORING PEOPLE IN OUR OWN 
COUNTRY DURING THE YEARS IMMEDIATELY FOLLOWING THE 
INTRODUCTION OF A DEPRECIATED PAPER CURRENCY IN 1862, 
AND ALSO TO THE VERY LOW RATES OF WAGES WHICH NOW 
PREVAIL IN COUNTRIES HAVING THE SILVER STANDARD OF 
VALUE, or the so-called double standard of value with coinage of silver at 
a legal ratio not corresponding with the commercial value of the metal, and 
in doing this I will make no statement that can not be fully sustained 
by reliable evidence. 

On the 3d of March, 1893, a subcommittee of the Committee on 
Finance in the United States Senate made a report on the course of prices 
and wages in this country for a period f"^ fifty-two years, embracing the 
prices of almost every article of consymption in common use among 
the people and the rates of wages in almost every industry carried on 
during that time, and, in order that you may learn from this official 
and impartial investigation what effect a depreciated currency has on 
wages and prices, I will briefly state some of the most material facts and 
conclusions embodied in that document. 

AN UNBIASED INVESTIGATION. 

The subcommittee consisted of five Senators, representing both political 
parties and both sides of the currency question, and the investigation, which 
lasted nearly two years, was most thoroughly and impartially made, with 
no purpose in view except to ascertain and report the actual facts; and, so 
far as it relates to questions of fact, the report was unanimous. As stated 
heretofore. Congress, early in the year 1862, inaugurated the policy of is- 
suing legal-tender paper, gold was driven out of circulation, specie payments 
were suspended, the currency began at once to depreciate, and before the 
close of the year the paper dollar was worth less than 76 cents in gold. 
From the time the depreciation began the prices of commodities and the 
wages of labor were paid in paper currency, and the Injurious effect upon 
the interests of the laboring man is clearly shown in the report referred to. 
In 1862 THE WAGES OF LABOR, PAID IN DEPRECIATED PAPER, 
WERE LESS THAN 3 PER CENT HIGHER IN PAPER THAN WHEN 
PAID IN GOLD, BUT THE PRICES OF THE 223 ARTICLES USED BY 
THE LABORERS AND OTHER PEOPLE IN THE MAINTENANCE OF 
THEIR FAMILIES WERE NEARLY 18 PER CENT HIGHER TH^ N 
THEY WERE WHEN PAID IN GOLD; in 1863 the wages of labor paid in 
depreciated paper worth about 69 cents on the dollar, were 10^/^ per cent 
higher than when paid in gold, but the prices of the articles the laborer had 
to buy with his wages were nearly 49 per cent higher; in 1864 the wages 
of labor paid in depreciated paper dollars worth 49 cents each had 
advanced 25^^ per cent^ but the prices of the necessaries of life hai ad- 
vanced 90% per cent.; In 1865 wages paid in paper currency worth 63 cents 
on the dollar had advanced 43 per cent above the rates previously paid 
in gold, or Its equivalent, but the prices of commodities had advanced nearly 
117 per cent— that Is to say, had more than doubled; and in 1866 wages paid 
In a currency worth 71 cents on the dollar had advanced a fraction mort* 

11 



than 62 per cent from the previous rates in gold or its equivalent, but the 
price of commodities had advanced 90 per cent. 

THE RATIO BETWEEN WAGES AND PRICES. 

The rise in the rates of wages never corresponded with the rise in the 
prices of other things until the year 1869, four years after the close of the 
war, when the value of alir currency was 71 cents on the dollar, and it was 
quite certain that no further depreciation would occur. In 1860 this country 
svas on a gold basis and had been on that basis for many years, under the 
operation of the acts of 1834 and 1837. Wages were then paid in gold, or 
its equivalent, and by reducing the wages paid in a depreciated currency to 
a gold basis, and comparing them with the rates paid in gold in 1860, we 
shall have another demonstration of the injurious effects of cheap money on 
the interests of the laborer. On this basis the laborer received 76 cents and 
2 mills in 1863, instead of the gold dollar he received in 1860; in 1864 he re- 
ceived 80 cents and 8 mills instead of a gold dollar, and in 1865 he received 66 
cents and 2 mills instead of a gold dollar. In other words, THE WAGES 
OF LABOR, MEASURED BY GOLD, AS THEY WERE IN 1860, WHEN 
WE HAD A SOUND CURRENCY, HAD FALLEN ABOUT 24 PER CENT 
IN 1863, MORE THAN.19 PER CENT IN 1864, AND NEARLY 44 PER 
CENT IN 1865, WHEN WE HAD A DEPRECIATED CURRENCY; and, gen- 
tlemen, the force of this illustration is greatly augmented by the facts 
that these reductions in the rates of wages occurred at a time when several 
thousand laborers had been withdrawn from the field of competition, when 
the Government was engaged in the prosecution of a great war and was ex- 
pending money lavishly for all kinds of supplies for the Army and Navy, 
and when the prices of all the products of labor had largely increased. 
Surely, if there ever can be a time when an abundance of cheap money 
will increase the wages and improve the condition of laboring men, these 
results ought to have been accomplished under the combination of favor- 
able circumstances existing, especially in the great centers of industry, from 
1861 to 1865, and yet there has been no other period in our history when 
the rates of wages fell so rapidly or so low. 

AN IMPRESSIVE WARNING FROM CHILE. 

The recent experience of the Republic of Chile furnishes another impres- 
sive warning to the wage-earner against the evils of a depreciated currency. 
That country had for a long time the so-called -double standard of value, 
with coinage of legal tender gold and silver at the ratio of 16.39 to 1, but as 
this was a considerable undervaluation of silver, the coins of that metal went 
out of circulation and gold constituted the medium of exchange and actual 
standard of value until about the beginning of the year 1876; but as soon as 
the commercial value of silver fell below the ratio of 16.39 to 1 as compared 
with gold, all the gold went out of circulation and the country had silver 
monometallism. In 1875, before this change took place, the peso, or dollar, 
of Chile, was worth about 88V2 cents in our money, but in 1885, ten years 
after gold went out and silver came in, the peso was worth less than 53 
cents in our money. Silver continued to depreciate, and, besides, large 
amounts of paper currency were issued by the government and the banks, 
and in 1895, twenty years after the change from the gold basis to the silver 
basis, the peso was worth only 34i/^ cents in our money. 

EFFECT OF SILVER MONOMETALLISM ON WAGES. 

Let us see, now, what effect this cheap money, or In other words this 
system of silver monometallism which you are asked to adopt here, had 
upon the wages of labor in that country. Our Minister at Santiag-o has 

12 



very recently made an official investigation and report upon this subject, 
which has not yet been published, from which it appears that in the north- 
ern part of Chile, where labor has always been in greater demand* than 
elsewhere, on account of the great nitrate fields located in that section of 
the country, very little change took place even in the nominal rates of 
wages, notwithstanding the great fall in the value of the currency; that is, 
laborers continued to receive in depreciated money about the same amount 
they received before in good money. In 1875, when the peso was worth 88V2 
cents, a mechanic, a boiler maker, a blacksmith, a carpenter, a fireman, 
and an ordinary laborer received together for a day's work 18i/^ pesos, or 
$16.37 in our money; in 1885 the same persons received for the same work 
20% pesos, but owing to the depreciation of the currency this was equal to 
only $10.93 in our money; and in 1895, twenty years after the country had 
descended to a silver basis, the same laborers received for the same work 
25.95 pesos, but the value of the peso was less than 35 cents, and conse- 
quently their wages amounted to only $8.34 in our money, or just about 
one-half what they had received twenty years before. 

THE AMERICAN MINISTER'S DECLARATION. 

In the central parr of the country the result was substantially the same, 
though not quite so injurious to the laborer. In 1875 a day's wages for five 
men — a mason, a carpenter, a gas fitter, a painter and an ordinary laborer 
—amounted altogether to $6.45 in our money; but in 1885 the wages of the 
same men were $5.53, and in 1895. $4.99. In the southern part of the repub- 
lic there was some increase in the nominal amount of wages paid between 
1876 and 1889, on account of the fact that a line of railway was then being 
constructed through that region by foreign capital, but since the latter date 
the general average rate of wages has remained substantially the same, 
although paid in constantly depreciating currency. Our Minister to Chile, 
after a very careful examination of the entire situation in that country, 
says: "IT MAY BE TAKEN FOR GRANTED THAT IN CHILE, AS IN 
ALD OTHER COUNTRIES WHICH HAVE HAD A LIKE FINANCIAL 
EXPERIENCE, THE CONSEQUENCES OP CHEAP MONEY HAVE 
WEIGHED MOST HEAVILY UPON THE CLASSES THAT ARE LEAST 
ABLE TO SUPPORT THE BURDEN." The evils of silver monometal- 
lism and a depreciated currency finally became intolerable in that country, 
and, although it produces considerable silver and very little gold, it has re- 
cently changed its policy and adopted the gold standard of value. 

THE GOLD STANDARD INCREASES WAGES. 

IN NEARLY EVERY COUNTRY IN THE WORLD HAVING THE 
GOLD STANDARD OP VALUE THE WAGES OP LABOR HAVE IN- 
CREASED MATERIALLY DURING THE LAST TWENTY-FIVE YEARS, 
AND. AT THE SAME TIME, THE PURCHASING POWER OF THE 
MONEY IN WHICH WAGES ARE PAID HAS INCREASED ALSO. WHILE 
IN THE COUNTRIES HAVING THE SILVER STANDARD OP VALUE 
WAGES HAVE BEEN ACTUALLY REDUCED BY THE DEPRECIA- 
TION OF THE CURRENCY TO SUCH AN EXTENT THAT THE LA- 
BORER IS IN A MUCH WORSE CONDITION THAN HE WAS AT 
THE BEGINNING OF THAT PERIOD. Japan, by far the most progres- 
sive and prosperous country in the East, coins both gold and silver at the 
ratio of 16.18 to 1, a ratio which greatly overvalues silver, and, as the gov- 
ernment does not maintain the parity of the two metals, the currency is on 
a depreciated silver basis. Wages are paid in silver, of course, because 
the laboring men and women always get the cheapest money in circulation, 
and they generally pay the highest prices for the articles they buy, for 

13 



the reason that their purchases are usually made in small quantities at 
a time. The Japanese silver yen is worth a little less than 50 cents in 
our money, and when the wages of labor, paid in this depreciated coin, 
are reduced to our standard of value, they appear so insignificant that it is 
difficult to understand how the people who receive the miserable pittance 
can live and maintain their families. The average daily earnings of a 
bricklayer amount to 33 cents; blacksmiths, carpenters and cabinetmakers 
receive 30 cents; compositors in printing offices, 29 cents; pressmen, 26 
cents; roofers, 29 cents; stonecutters, 36 cents; ordinary tailors, 28 cents; 
weavers, 15 cents; and in all the long list of occupations and wages no labor- 
er, however skilled, can be found who receives more than 49 cents per 
day, except porcelain artists in the great city of Yokohama, who get 72 
cents. Factory laborers even in that city, where most of the great indus- 
tries are carried on by American or European capitalists, receive 21 cents 
per day, and in other parts of the country they receive less. 

FREE SILVER IN MEXICO— SOflE RESULTS. 

Our neighboring Republic of Mexico, with a constitutional government 
very similar to our own, with an area of 767,000 square miles and a popu- 
lation of only about 12,000,000, with almost marvelous natural resources 
awaiting development, and offering a most inviting field for the investment 
of capital and the employment of labor, has the silver standard of value, 
gold not being in use, and if cheap money is a blessing to the laboring man, 
he ought to be prosperous and happy in that country. The Mexican dollar 
contains 377.17 grains of pure silver, or nearly 6 grains more than is contain- 
ed in our dollar, and yet, not being sustained by a monetary system which 
keeps it at a parity with gold, it is worth only about 53 cents in our money. 
Wages are paid in silver, and are very low in comparison with the wages 
paid in this country for the same services, in many instances not being half 
as much, while the prices of commodities generally are much higher than they 
are here. The prices of imported articles especially are exorbitantly high in 
Mexico, because they have to be paid for abroad in gold, and the deprecia- 
tion of their money is so great that IT REQUIRES NEARLY TWO DOL- 
LARS IN SILVER TO PAY ONE IN GOLD. 

WHY OUR SILVER DOLLAR BUYS MORE IN MEXICO. 

Although our own silver dollar contains less fine silver than the Mexican 
dollar, one of ours is nea/ly equal in exchangeable value to two of theirs, 
because here the coinage is limited and the Government issues the coins 
on its own account and has pledged its faith and credit to keep them as 
good as gold, a pledge that has been faithfully kept up to this time, not- 
withstanding the complaints and denunciations of our free-coinage oppo- 
nents. UNDER OUR POLICY THE DOLLAR PAID TO THE LABORING 
MAN FOR HIS WAGES IS JUST AS GOOD AND WILL PURCHASE 
JUST AS MUCH IN THE MARKETS AS THE DOLLAR PAID TO THE 
BONDHOLDERS, OR TO ANY OTHER CLASS OF CREDITORS; BUT IF 
WE ARE TO HAVE FREE AND UNLIMITED COINAGE OF LEGAL- 
TENDER SILVER FOR THE BENEFIT OF THE OWNERS OF THE 
BULLION, THE GOVERNMENT AND THE PEOPLE AT LARGE WOULD 
HAVE NO INTEREST WHATEVER IN THE COINS, AND IT WOULD 
BE GROSSLY UNJUST TO REQUIRE THE GOVERNMENT TO KEEP 
THEM EQUAL IN UNCHANGEABLE VALUE TO GOLD. THE DOL- 
LARS, AS RAPIDLY AS COINED, WOULD BE DELIVERED TO THE 
OWNERS OF THE BULLION FREE OF CHARGE, AND THE GOV- 
ERNMENT WOULD HAVE NO LEGAL OR MORAL RIGHT TO TAX 
ALL THE PEOPLE OF THE COUNTRY IN ORDER TO PROCURE GOLD 

14 



With which to redeem these private coins. tHe value 
of our dollar would, therefore, be no greater than 

THE INTRINSIC OR COMMERCIAL VALUE OF THE SILVER CON- 
TAINED IN IT, AND ITS PURCHASING POWER IN THE MARKETS 
WOULD BE DIMINISHED ABOUT ONE-HALF; BUT THE WAGES OF 
LABOR WOULD REMAIN, FOR A LONG TIME, AT LEAST, SUBSTAN- 
TIALLY AT THE PRESENT RATES, OR IF THEY SHOULD BE NOMI- 
NALLY INCREASED ON ACCOUNT OF THE DEPRECIATION OF THE 
CURRENCY, EXPERIENCE IN THE PAST SHOWS THAT THEY 
WOULD NOT INCREASE IN PROPORTION TO THE INCREASE IN 
THE PRICES OF COMMODITIES. Rises in the rates of wages take place 
very slowly, while the prices of commodities move rapidly, at some periods 
changing- several times in the course of a single day, and these movements 
are always more frequent and more harmful when the currency is in an un- 
settled condition. 

A nOVEflENT TO REDUCE WAGES. 

You have doubtless observed recently what appears to be quite a 
formidable demonstration in favor of the free coinage of silver by cer- 
tain large manufacturing interests in the eastern part of the country, 
upon the ground that if we continue to maintain our present standard 
of value the silver standard countries, especially India, China, and 
Japan, will soon be able to undersell them in the markets of the world. 
Reduced to its simplest form, the proposition of these gentlemen is that 
THE MANUFACTURERS OF CERTAIN KINDS OF GOODS IN THIS 
COUNTRY CAN NOT CONTINUE TO PAY THEIR LABORERS HIGH 
WAGES IN GOLD, OR ITS EQUIVALENT, AND COMPETE SUCCESS- 
FULLY IN THE MARKETS ABROAD WITH THE MANUFACTURERS 
OF SIMILAR GOODS IN SILVER-STANDARD COUNTRIES, WHO PAY 
THEIR LABORERS LOW WAGES IN DEPRECIATED SILVER AND, 
THEREFORE, THEY INSIST THAT A MONETARY SYSTEM SHALL 
BE ADOPTED HERE WHICH WILL GIVE THEM THE ADVANTAGE 
OF PAYING FOR THEIR LABOR IN DEPRECIATED SILVER. THE 
THEORY IS THAT WITH FREE COINAGE OF LEGAL-TENDER SIL- 
VER, THE WAGES OF LABOR IN THIS COUNTRY WOULD BE PAID 
IN SILVER DOLLARS WORTH ABOUT HALF AS MUCH AS GOLD 
DOLLARS, BUT THE PRODUCTS OF LABOR, WHICH W^OULD BE- 
LONG TO THE EMPLOYER, WOULD BE SOLD FOR GOLD IN THE 
MARKETS ABROAD, AND THAT THE GOLD THUS OBTAINED COULD 
BE EXCHANGED FOR SILVER AT ABOUT THE RATE OF ONE DOL- 
LAR IN GOLD FOR TWO DOLLARS IN SILVER; and thus the process 
would go on, the employer getting gold of full value, and the laborer 
getting depreciated silver, which, in the opinion of these gentlemen, would 
be a most happy solution of this question, 

AMERICAN LABOR DEMANDS PAYMENT IN GOOD MONEY. 

If the interests of labor are to be left entirely out of consideration, 
and if it were not reasonably certain that a sudden revolution in our mone- 
tary system would at once arrest the progress of all our industries, and 
produce almost universal bankruptcy, this scheme to make the employer 
very rich, and the laborer very poor, might be worthy of serious consider- 
ation; but THE AMERICAN LABORER HAS A RIGHT TO DEMAND 
PAY FOR HIS WORK IN AS GOOD MONEY AS THE EMPLOYER RE- 
CEIVES FOR HIS PRODUCTS IN ANY PART OF THE WORLD, AND 
WHEN HE SURRENDERS THIS RIGHT HE IS DOOMED TO THE 



SAME FATE THAT HAS ALREADY OVERTAKEN HIS BROTHERS IN 
THE SILVER-STANDARD COUNTRIES. It is but simple justice to say, 
in this connection, that the great body of employers, a vast majority of the 
men who have embarked their capital in industrial enterprises and are rely- 
ing for success upon their skill and energy in the prosecution of their 
business, do not want the present standard of value overthrown, because 
they know that the establishment of silver monometallism would be ruin- 
ous to them and to all who are dependent upon them for employment, or for 
the supply of commodities at reasonable prices. 

AflERICAN LABOR IS A LARGE CREDITOR— THE 
DEBTS DUE IT. 

If the solution of this question affected only the character and 
amount and purchasing power of the future earnings of the American la- 
borer, it would still be a subject of the gravest importance to him; but 
its importance is greatly increased by the fact that the safety and value 
of a very considerable part of THEIR PAST EARNINGS ARE ALSO 
INVOLVED. The thrifty and provident workingman, anticipating a time 
when he may be disabled or deprived of employment, has endeavored to 
save something out of his earnings, in order to provide for the comfort of 
his wife and children in the future, and has laid it away at home, or 
deposited it in a bank or building association, or invested it in a life 
insurance policy, or loaned it to some friend in whom he has confidence. 
He is not a debtor, but a creditor, and the corporations and individuals 
having the custody of his earnings are indebted to him, and ought to 
pay what they owe him in just as good money as he put into their hands. 

WORKINQMEN'S DEPOSITS IN SAVINGS INSTITUTIONS. 

According to the latest reports, the savings banks in your own State 
hold $24,357,400 on deposit for 83,802 people, or an average of $257 for 
each depositor, and in the whole co untry they hold $1,810,597,000 for 
4,875,519 people, or an average of $371 for each depositor. State 
banks, trust companies, and private banks hold $1,340,888,000 for about 
1,500,000 people, and national banks hold $1,701,653,521 for 1,929,340 de- 
positors, of whom 1,724,000 have less than $1000 to their credit. Besides 
these institutions, there are 6000 building and loan asociations in the 
United States, having about 1,800,000 shareholders, male and female, who 
have paid dues in good money, amounting to more than $500,000,000. There 
are nearly 700 of these associations in the State of Illinois alone, and in 
these institutions many laborers— men, women, and even children— have de- 
posited every dollar they could spare, often denying themselves some of 
the comforts of life, in order to lay up something for a time of need. 

More than 2,000,000 of our people have taken out life insurance poli- 
cies, which are now in force, amounting to $4,202,857,323, and have paid 
the premiums on them year after year in good money, while the mutual 
benefit and assessment and co-operative and fraternal companies and as- 
sociations have 3,500,000 members who have contributed a large part of 
their earnings to the funds held to reimburse losses sustained by sickness 
or death. The obligations of these companies and associations to their 
members amount to $5,184,670,936: and the industrial companies in the 
United States have a membership of 6,919,998, with insurance amounting to 
$816,650,678 in addition to all the foregoing, and it is constantly increas- 
ing. How many laboring men and women have taken out policies or oth- 
erwise contributed from their earnings to insure themselves against loss 
by accident while engaged in the prosecution of their work cannot be ac- 
curately ascertained, but the number is known to be very large. 

16 



MAaNlTUDE OF SAVING DEPOSITS. 

THE BANKS. TRUST COMPANIES. BUILDING ASSOCIATIONS AND 
OTHER SIMILAR INSTITUTIONS OWE THE PEOPLE OF THE UNITED 
STATES TO-DAY $5,353,138,521 FOR MONEY ACTUALLY DEPOSITED. A 
SUM NEARLY EIGHT TIMES GREATER THAN THE TOTAL CAPITAL 
OF ALL THE NATIONAL BANKS IN THE COUNTRY; while the hfe in- 
surance policies held by the people in the various kinds of corporations 
and associations and in force to-day amount to $10,203,804,357, a larger sum 
than has been actually invested in all our railroads, and about fifteen times 
larger than the capital of all the national banks. In view of these facts, 
which can not be successfully disputed, I submit that YOU OUGHT SE- 
RIOUSLY TO CONSIDER ALL THE CONSEQUENCES TO YOURSELVES 
AND YOUR FELLOW CITIZENS BEFORE YOU AGREE TO THE FREE 
AND UNLIMITED COINAGE OF LEGAL TENDER SILVER AT A RATIO 
OF 16 TO 1. IN ORDER THAT THESE GREAT CORPORATIONS AND 
ASSOCIATIONS MAY HAVE THE PRIVILEGE OF DISCHARGING 
THEIR DEBTS TO THE PEOPLE BY PAYING 51 OR 52 CENTS ON THE 
DOLLAR, FOR THAT IS EXACTLY WHAT IT MEANS. 

WILL DEMAND THEIR DEPOSITS IN THEIR ORIGINAL 

VALUE. 

It is a low estimate to say that each one of the depositors in savings 
and other banks and in building associations, and each holder of a life 
insurance policy and member of a mutual benefit and assessment associa- 
tion has dependent upon him or her an average of at least two other per- 
sons, and, if so, a majority of all our people are directly or indirectly 
creditors of these corporations and associations and are interested in the 
preservation of a standard of value which will insure the payment of their 
claims in as good money as they parted with when they made their loans 
or deposits or paid their assessments or premiums. EVERY DOLLAR 
THE PEOPLE PUT INTO THESE BANKS AND TRUST COMPANIES 
AND OTHER INSTITUTIONS. AND EVERY DOLLAR THEY PAID 
FOR INSURANCE WAS WORTH 100 CENTS AND WOULD PROCURE 
100 CENTS' WORTH OF COMMODITIES IN THE MARKET WHEN 
THEY EARNED IT AND WHEN THEY INVESTED IT, AND THEY 
HAVE AN UNQUESTIONABLE RIGHT TO DEMAND THAT IT SHALL 
BE REFUNDED TO THEM IN DOLLARS WORTH 100 CENTS EVERY- 
WHERE. The adoption of any policy that would deprive them of this 
right would not only inflict an enormous loss upon them, but would so 
seriously impair their faith in the fidelity and utility of such institutions 
that attempts to accumulate and save surplus earnings would be abandon- 
ed, or at least greatly discouraged, for a long time to come. 

FREE COINAGE W^OULD SCALE OR DESTROY THE DEBT. 

But if free and unlimited coinage of legal tender silver at the ratio of 16 
to 1 is established in this country, a very large part of the money deposited 
in these various kinds of savings institutions will not even be repaid in de- 
preciated silver, but will be wholly lost, because such a reckless monetary 
system would precipitate a financial pmic, which very few, if any, of the 
depositories could survive. I doubt that there is a single financial institution 
in the country that could sustain the pressure that would be immediately 
made upon it by its depositors and other creditors, when it became apparent 
that our standard of value was to be lowered and our currency depreciated 
by free coinage. Payment of all our obligations held abroad would be de- 
toanded In gold at once : every Investment of forelgm capital In thi^ 

1? 



country would be Instantly withertrawn; every man who owed a debt at hom» 
or abroad would be called upon to p y it. All depositors in banks and 
other institutions would want to withdraw their money at the same time: NO 
LOANS COULD BE NEGOTIATED AND NO CREDIT WOULD BE GIVEN, 
BECAUSE NO MAN WOULD LEND MONEY OR SELL PROPERTY ON 
TIME WHEN HE KNEW WITH ABSOLUTE CERTAINTY THAT HE 
WOULD BE PAID IN A DEPRECIATED CURRENCY. CREDITORS 
WOULD NOT WAIT FOR THE ACTUAL PASSAGE OF A FREE-COIN- 
AGE LAW, BUT AS SOON AS SUCH A MEASURE HAD RECEIVED THE 
APPROVAL OF THE PEOPLE AT AN ELECTION THEY WOULD DE- 
MAND THEIR MONEY, AND IF NOT PAID THEY WOULD ENFORCE 
ITS COLLECTION BY JUDICIAL PROCEEDINGS AND THE FORCED 
SALE OF PROPERTY. It is useless for you and me or anybody else to 
say that depositors in banks and other creditors ought not to pursue this 
course when a crisis comes, or is apprehended, for they alway^ have pur- 
sued it, and always will, unless human nature itself should be changed. 

THE RECENT FINANCIAL CRISIS. 

Less than three years ago you saw our financial, commercial and in- 
dustrial affairs violently disturbed by the fear that the Government would 
not be able to maintain gold payments, and that our currency would 
descend to a silver basis. You saw the operations of industry interrupt- 
ed, banks failing, great commercial houses unable to meet their obliga- 
tions, credit seriously impaired, mills and factories closed and thousands 
of laborers thrown out of employment, and a state of panic and business 
disorder prevailing in every part of the country. If a mere doubt as to 
the kind of money we intended to use produced these distressing results, 
what think you would be the probable consequences of a deliberate de- 
termination upon the part of our people to adopt silver monometallism as a 
permanent system? The imagination can scarcely conceive the deplorable 
state of society that Would immediately follow the announcement of such 
a policy, and I will not attempt to describe it. It can not be possible tha* 
in the closing years of the nineteenth century and in this great and fret 
Republic the people themselves will imitate the bad examples set by the 
corrupt potentates of Europe, who have made their names forever odious 
in history by debasing the money of their subjects and robbing the in- 
dustrious poor of the just rewards of their labor. THE GREATEST CRIME, 
SHORT OF ABSOLUTE POLITICAL ENSLAVEMENT, THAT COULD 
BE COMMITTED AGAINST THE W^ORKINGMAN IN THIS COUNTR"^ 
WOULD BE TO CONFISCATE HIS LABOR FOR THE BENEFIT Ol 
THE EMPLOYER BY DESTROYING THE VALUE OF THE MONEY IN 
WHICH HIS WAGES ARE PAID. But, gentlemen, this irreparable 
wrong can ne^^er be perpetrated under our system of government unless 
the laboring man himself assists in forging his own chains. 

And, now, gentlemen, having submitted as briefly and as plainly as 
the nature of the subject would permit, some of the reasons why I think 
your interests demand the maintenance of a sound and stable currency, I 
thank you most sincerely for your kind and patient attention, and will de- 
tain you no longer. " 



II 



i 



The Treasury Condition— 16 to i Free Silver, 



■^♦♦- 



s:e=»ee:cs: 



OJ? 



Hon. Nelson Dingley, Jr., 



OK NI^INE), 



n THS 



HOUSE OF REPRESENTATIVES. 



February 6, 1896, 



WASHINGTON, D. C. 

1896. 



DINGLKY 

ON 

Treasary Gonditioii-IG to 1, fm Silver. 



MR. DINGLE Y said: 

Mr. Chairman: At the proper time, under the instructions of the Com- 
mittee on Ways and Means, I shall move that the House nonconcur in the Sen- 
ate amendment in the nature of a substitute and insist upon the bill as it 
passed the House. 

If there were no other reasons, Mr. Chairman, for nonconcurring in the sub- 
stitute amendment of the Senate, it would be suflBcient that the Senate has re- 
turned to the House not one line or one word of the bill which the House sent 
to the other body, but a substitute on another subject entirely distinct, which, 
if it had been moved as an amendment in the House, would at once have been 
ruled out of order as not germane to the subject which the House was consider- 
ing. 

WHAT THE HOlJSiE PROPOSED. 

The House sent to the Senate two bills. The first provided for an increase 
of the revenue to the extent of about $40,000,000, to prevent deficiencies and 
to furnish the Government sufficient revenue to meet its expenses. It also sent 
to the Senate a second bill— the pending bill— proposing three things: First, 
authorizing a reduction of the rate of interest and the length of time during 
which bonds should run, when issued under the resumption act of 1875; reduc- 
ing the rate of interest from 4 per cent., as provided under the act, to 3 per 
cent, and reducing the length of time which the bonds had to run from 
thirty years to five years, with a maximum of fifteen years. 

The bill as sent from the House to the Senate also provided that when- 
ever bonds should be issued under the act of 1875 they should be offered first 
to the American people as a popular loan; and lastly, that the proceeds of the 
sale of the bonds under the act of 1875 should be devoted exclusively to resump- 
tion purposes under that act, and that whenever, incidentally, there should be a 
failure of revenue to meet the expenses certificates of indebtedness running 
three years and payable from revenue to accrue should be used instead of the 
proceeds of the sale of bonds. 

The House is entitled to some answer to the propositions in which they asked 
the concurrence of the Senate. If the Senate had returned the House bill with 
an amendment, proposing to repeal the act of 1875, there would have been at 
]east some relevancy in their action. But a majority of the Senate distinctly de- 



feated a proposition of that kind, thiis practically confirming the continnaiieo 
of the issuance of bonds under th6 act of 1875, running thirty years and bear- 
ing 4 per cent, interest, and refusing to authorize a reduction of the rate of 
interest to 3 per cent, and limitation of time to fifteen years; and doing this, 
too, when they knew that 4 per cent, bonds running thirty years would con- 
tinue to be issued under the act of 1875 if the House bill should not be con- 
curred in by the Senate. 

If the Senate had promptly concuired in this House provision, the hundred 
million loan for which bids hare just been opened would have been made a 3 
per cent, loan and offered at par to the American i>eople. And the responses 
made to this 4 per cent, loan make it certain that every dollar would have been 
taken, and the saving to the people in this loan alone would have been at least 
$80,000,000. 

The House, Mr. Chairman, is entitled to a definite answer to the second 
proposition that it made, that bonds issued under the act of 1875 should be 
first offered as a popular loan to the American people. The majority of the 
Senate have struck out that provision of the House bill, and thus has per- 
mitted a repetition of the sale of bonds to foreign syndicates at inadequate 
prices without offering them to the American people. 

I take it that the House proposes to insist on these two propositions, and, 
further, to insist on its third proposition, that when bonds are sold under the 
act of 1875 the proceeds shall be devoted exclusively to redemption purposes, as 
provided in the act of 1875, and not to be indirectly used, as they have been 
practically used during the past two and a half years, to meet deficiencies of 
revenues. 

SAIiE OF BOWDiS TO MEET REVENUE DEFICIENCIES. 

What has been going on, Mr. Chairman, for the last two and a half years? 
One hundred and sixty-two million dollars of bonds have been sold, from which 
has been realized $182,000,000 in gold. One hundred and eighty-two million 
dollars in greenbacks have been redeemed, and immediately $133,000,000 of the 
$182,000,000 redeemed have been paid out to meet a deficiency in revenue, 
and thus made available for a second presentation for redemption. 

The House bill proposes to stop that procedure, and to provide that all the 
proceeds of bonds shall be devoted exclusively to the one purpose of main- 
taining the redemption fund, and that whenever there shall be a deficiency 
of revenue that certificates of indebtedness shall be sold, bearing interest not 
exceeding three per cent and payable from revenue within three years. This 
would have practically separated the reserve or redemption fund from the funds 
devoted to the payment of current expenses. 

Mr. Chairman, the House, I take it, will insist upon all three of Its propo- 
sitions. It will not consent that a bill sent to the Senate bearing upon a dis- 
tinct subject, to accomplish the three distinct purposes which I have named, 
shall be returned to this House with every line and every word struck 
out and an entire measure substituted, not only upon a different subject, but on 
a subject not having the slightest relation to the three points on which the 
House asked the concurrence of the Senate. 



The propositions contained in the pending measure as It passed the Honse 
are so important to a restoration of the Treasury to the eonnd condition which 
existed from 1879 to 1893 that the House ought to insist on the action it has 
already tal^en. 

I might stop here, Mr. Chairman, and not proceed to discuss at all the sub- 
stitute that has been proposed by the Senate. I might be and every gentle- 
man here might be in favor of every line of the Senate substitute, and yet this 
House would have a right to demand of the Senate that it should either con- 
cur in our action or present an amendment repealing the act of 1875 — leaving 
legislation on another subject to come up in an orderly way. One or the other 
horn of this dilemma, if the majority of the Senate choose to call it a dilemma, 
the Senate ought to be required to take. Either authority should be given to 
reduce the rate of interest and to require public loans, or else the act of 1875 
should be repealed. 

THE NATIONAL. CREBIT. 

But, Mr. Chairman, I do not propose to stop here. I desire to discuss, as 
briefly as possible, the character of the substitute which the Senate has pre- 
sented; a substitute, be it remembered, on an entirely different subject. What 
is that substitute? It consists of three parts. The last proposition (for I will 
consider them in inverse order) authorizes and directs the Secretary of the 
Treasury to redeem greenbacks or Treasury notes, at his option, in either stand- 
ard silver doUart or gold. 

Now, what is the object of that proposed legislation? If it does nothing 
except simply authorize the Secretary of the Treasury, at his option, to select 
either form of money in redemptions, then it is merely the law as it exists 
now, and has existed for years. But no doubt it will be claimed— and I am not 
sure but with good reason— that inasmuch as this legislation reaffirms the 
existing law and omits the parity provision of the act of 1890, it would re- 
peal this provision. Perhaps it was intended to do that. What was that pari- 
ty provision of the act of 1890 which limited, or at least indicated the direc- 
tion of the discretion of the Secretary of the Treasury? It was the declaration 
that it is— 

The established policy of the United States to maintain the two metals on 
a parity with each other upon the present legal ratio or such ratio as may be 
provided by law. 

Is it the object of this substitute to repeal the parity provision of the act of 
1890 by this legislation, so as to give some basis to the claim that it was intend- 
ed to mean that if gold and silver coins should part, then the Secretary of the 
Treasury should pay for redeemed notes in the cheaper money? And is it in- 
tended to follow this up with other legislation which will break the parity be- 
tween gold and silver? 

Mr. Chairman, whether that was intended or not, if this substitute should be- 
come law there is not a man in this country who has money to loan to the Gov- 
ernment but would take alarm if such legislation should be had at this time, fear- 
ing that the Government of the United States had reached the point where it de- 



sired to break the parity between tlie two metals, and that therefore this Ugi»- 
lation was to be taken as notice to all the world that at an early date it was 
proposed to hare such further legislation as would make our gold and silver coins 
part company. 

For if it is proposed not to have them part company, but to maintain silver 
and gold at a parity— for everybody knows that our standard silver dollars were 
coined on the account and for the profit of the Government, and are therefore 
maintained at a parity with gold by limitation of the amount and indirect re- 
demption by receiving them for gold duties— then what would be gained by a 
declaration which would serve only to increase distrust? 

The suggestion that France compels the holders of the French paper currency 
to sometimes accept silver in part payment at least of notes presented for re- 
demption, and yet preserves the parity of these notes with gold, overlooks the 
fact that it is not the Government of France that issues circulating notes, but a 
corporation distinct from the Government, known as the Bank of France, 
which maintains a coin reserve of nearly six hundred and thirty-four millions 
(of which nearly three hundred and eighty-five millions is gold) against a note 
circulation of only six hundred and seventy-five millions, and which as a bank of 
discount can protect its reserve by raising the rate of discount and other means not 
available to a government that Issues its own notes without any assets except rev- 
enue derived from taxation. Moreover the Government of France does not permit 
the free coinage of silver, and maintains her full legal tender silver at a parity 
with gold precisely as the Government of the United States maiataina our silver. 

A GOVERNMENT NOTE IS THE DERT OF HONOR. 

There is no doubt of the power of the United States to redeem greenbacks 
or pay any Government obligations in any kind of money that it chooses, 
or even to repudiate the entire debt. A government cannot be sued or its 
assets attached. A government note or bond is a debt of honor, and the only 
assurance the holder of a government note or bond has that he will receive what 
he or the creditor who sold him such promise loaned to the government is his 
confidence In the good faith of the nation which gave it 

The only question for the nation which gave the promise is not one of 
technical power to discharge the debt in inferior money, for it has that power, 
but one of honor and good faith. And even this question must be considered 
in the light of the fact that the life of a nation is not limited like that of an 
individual to a few brief years, but will probably go on for many generations 
and centuries. It is certain that any nation will sooner or later come into 
straits where its reputation for good faith in the payment of its obligations 
will not only secure for it credit which would have not otherwise been granted, 
and credit, too, on terms far more advantageous than would have otherwise 
been possible. Whatever may happen, I feel assured that the people of this 
country will see to it that every dollar of the money which they have borrowed 
and for which obligations are now outstanding, all of which has been gold or 
its equivalent, will be paid in money of equal value to that .which we have 
received. (Applause.) 



[4.nd wlien nothing is to be gained by any other course, wiedom, if nothing 
tAse, would dictate that we talk very little about expedients which would be 
regarded by the world as looking to repudiation. For so long as we maintain the 
policy of preserving the parity between ou;^.' gold and our silver coin — and we can- 
not have both gold and silver at the same time as money unless we do preserve 
that parity — so long as we do preserve it not one farthing is to be gained by 
forcing upon any unwilling creditor a kind of money which, for any reason, 
he may distrust. 

In fact, if we would drop that kind of talk and speak boldly and honestly of 
onr intention to maintain our good faith, all kinds of money would be accepted 
without the least question by anyone. Why, sir, I am informed that until 
1893 the bondholders accepted, even in payment of bonds, the current currency 
of the country vnthout any question, in large part because there was no reason 
to distrust our good faith and our purpose to maintain the two kinds of money 
at a parity. 

THE SIIiVEB DOIiliARS IN THE TREASURY. 

Mr. Chairman, judging from much that I have heard here and elsewhere, 
there is an impression that we have in the Treasury of the United States a 
large mass of silver dollars belonging to the Government that could be used for 
the purpose of redeeming the greenbacks. But where are they, Mr. Chairman? 
I have here the report of the Treasury Department for yesterday. How many 
silver dollars are there in the Treasury? Three hundred and fifty-three mil- 
lion dollars, besides the fund set aside for the redemption of the Treasury notes. 
What is the condition of that $353,000,000? Three hundred and forty-six mil' 
lion dollars of silver certificates are outstanding against them. Who owns 
the 346,000,000 silver dollars deposited, represented by $346,000,000 of silver 
certificates outstanding? Not the Government, but the people of this country; 
there is scarcely a citizen of the United States who does not own some of them 
by having in his possession a silver certificate. Only 7,000,000 of silver dollars 
outside of the fund under the act of 1890 are in the Treasury to-day, belonging 
to it in such a way as to be made available for the redemption of the green- 
backs. Therefore, what is proposed is to disturb confidence in this country still 
more — to create the impression that we propose to repudiate something whether 
we do or not— all because of simply $7,000,000, and every one of these silvet 
dollars can be used for other purposes instead of greenbacks, and thus main- 
tain the confidence which existed from 1879 to 1893. 

There is no excuse in the present condition of the Treasury for parading 
abroad throughout this country again what is already tie law, unless you propose 
to repeal the parity act of 1890 and increase a distrust which already exists. 
The end of using these $7,000,000 for redemption purposes does not justify the 
means. 

Mr. McRAE: I ask the gentleman to tell us how much silver bullion there is 
in the Treasury purchased under the act of 1890, and why that should not be 
coined into silver dollars and used to redeem the Sherman Treasury notes, and 
thereby to that extent relieve the drain upon the gold reserve? 



THE TREASURY BlJIililON AND THE CERTIFICATE 

DEVICE. 

Mr. DINGLE Y: I am coming to that. My friend from Arkansas atske, 
why not use the silver bullion which was purchased under the act of 1890 by the 
use of Treasury notes? We are using it every day, gradually and safely, tinder 
the operation of the unrepealed provisions of the act of 1890, for the redemption 
and cancellation of thesj Treasury notea. But should it be used for the re- 
demption of the greenback? Are you not aware, my friend, that there is a re- 
demption going on every day— a redemption of Treasury notes with silver dol- 
lars coined from the fund of silver bullion that was purchased under the act 
of 1890? 

Mr. McRAE: To what extent? 

Mr. DINGLE Y: More than $18,000,000. 

A MEMBER: Nineteen million dollars. 

Mr. DINGLE Y: Nearly $19,000,000 has been redeemed, and most of it 
in the past year and a half. 

Now, let us consider what the process is that is going on, and going on 
safely, at the present time. We have in the Treasury as a redemption fund 
under the act of 1890 silver bullion that cost $124,000,000 and $13,000,000 of 
coined silver dollars, against one hundred and thirty-seven millions of Treasury 
notes. Under that act it is provided that this silver bullion shall be coined 
as fast as it may be required for the redemption and cancellation of Treasury 
notes that may be presented for redemption in silver dollars. How does it hap- 
pen that while this volume of Treasury notes was originally over $155,000,000 
it is to-day only $137,000,000? There is going on a process of redemption and 
cancellation of Treasury notes by the substitution of silver certificates, gradual- 
ly and safely, as business demands. This comes under a provision of the act of 
1890, which provides that the volume of outstanding Treasury notes shall at 
no time exceed the silver dollars coined from the bullion purchased under this 
act and the cost of the uncoined bullion; so that when a Treasury note is re- 
deemed in silver it must be immediatelry canceled, as the silver dollar or silver 
certificate representing the silver dollar goes into circulation in its place. 

Now, this fund of silver is being constantly used in this way. Holders of 
Treasury notes are voluntarily presenting them every day at the Treasury for 
redemption in silver dollars. Why? Because the policy of the Treasury De- 
partment is to gradually place the smaller denominations of our pai)er money 
in silver certificates. Whenever it is desired to obtain a larger amount of 
ones, twos, or fives, the way in which they can be most speedily obtained is to 
ask for the redemption of the larger denominations of Treasury notes in silver 
dollars, and the immediate issue, on the deposit of those, of silver certificates 
in the denominations of ones, twos, and fives. 

HOW THE BUIiL.ION IN THE TREASIURY Wllili BE 

CONSUMED. 

Now, when this process is going on safely, why propose by one bold 
stroke to in.creakse rajpidly and illegitimately the distrust that exists in this 



8 

conntry and to put into circulation a larger volume of these notes than can be 
used in the ordinary transactions of business, causing them at once to be pre- 
sented at our custom house* for the payment of customs duties? What is gain- 
ed by such a process? If you force these notes out quickly, as proposed by 
the provision of the Senate bill, every dollar of them will within six months 
be back, being paid in for customs duties in lieu of gold. Then, gentlemen, we 
will wonder why we do not receive more gold from customs duties. 

If, on the contrary, the act of 1890 continues to be executed as it is being 
executed to-day, within a comparatively few years, as business revives, every 
dollar of the $124,000,000 of silver bullion that is now in the Treasury be- 
longing to that fund will have been coined and used in redeeming and can- 
celing Treasury notes, in lieu of which will have gone out silver certificates, 
gradually as business desires them, and whatever profit may hare accrued 
from the coinage will have been covered into the Treasury. That ia the safe 
way of using the bullion in the Treasury and converting it into money and at 
the same time eliminating the Treasury notes from our currency . 

Now, what is proposed by this measur© which has come from the Senate? 
It is proposed to make one grand grab; to violate the good faith pledged by 
the act of 1890, and alarm the business public. But what is really proposed? 
Look for a moment at it. It proposes to direct the issue at once of about $40,- 
000,000 of silver certificates, representing, as it is said, the seigniorage or 
profit that would accrue after the $124,0(K),000 of silver bullion is coined— 
although not a dollar of it has been coined. Now, whart is a silver certificate? 
Take one out of your pocket, if you please, and read it. "This certifies that 
there have been deposited in the Treasury of the United States" $5, $2, or $1, 
as the case may be, "payable to the bearer (or holder) of the certificate on de- 
mand." 

Now, what does the Senate substitute propose? It directs the Secretary 
of the Treasury to issue certificates certifying that $40,000,000 silver dollars 
have been deposited in the Treasury for their redemption, when, as a matter 
of fact, there has not been one dollar deposited or even coined. Why, such a 
proposition has never before been heard of in finance outside of the Congress 
di the United States. (Laughter.) Direct your Secretary of the Treasury to 
certify to a falsehood, and then wonder why anybody distrusts the good faith 
of the Government of the United States! 

But what is gained? If you will only consider a moment, and wait, and 
allow the act of 1890 to work its own salvation, you will have obtained and 
covered into the Treasury every dollar of the seigniorage or profit, and done it 
without violating the good faith of the nation and ia a way that will not 
disturb public confidence. The road of good faith is straightforward in this 
matter; the road of bad faith is tortuous. Honesty, Mr. Chairman, straight- 
forward dealing, is not only the right thing but is good policy for a nation 
as well as an individual. 

I am sure that the House, when it comes to consider what is proposed 
to be accomplished here, will see that the proposition can only increase the 
distrust that already exists, and will make the road to recovery longer and 



9 

more difficult. But even If we should concur In the Senate's proposition, 
how would it help us in the redemption of the greenbacks? Will some gen- 
tleman please tell me how the Senate provision, which directs that silver 
certificates, which are to be issued on a pretense that they represent de- 
posited dollars not yet coined, shall be used in meeting current expenditures, 
not devoted to redemption purposes — and this, let me say, i» the reply to the 
gentleman who asked a few monments ago, "Why not use the $124,000,000 of 
silver bullion which was purchased under the act of 1890 to redeem green- 
backs and Treasury notes?"— will some gentleman pleaae tell me how this 
provision can add anything to the redemption fund? 

SII.TER COINAGE AT 16 TO 1. 

I gay that we have 346,000,000 of silver dollars in the Treasury, against 
which there already exists $346,000,000 of silver certificates, certifying that 
these dollars have been deposited to their credit— silver dollars which do not 
belong to the Government, but to the holders of the certificates; and if any more 
silver certificates are issued without depositing new silver dollars to represent 
them they are based upon a fund that does not exist. 

Mr. Chairman, it is said that although nothing will come for greenback-re- 
demption purposes, either from the silver dollars that could be availed of to-day 
in the Treasury or from the fund which remains as against the Treasury notes, 
purchased by the issue of Treasury notes, yet, somehow or other, by the adop- 
tion of free coinage of silver at the ratio of 16 to 1 we will furnish a fund 
for redemption. How, pray? What is the free coinage of silver at the ratio of 
16 to 1? It i« authorizing the individual owner of silver to go to our mints 
and have there 371% grains of fine silver converted into a silver dollar at the 
expense of the Government. And who gets the dollar? The owner of the silver 
bullion gets it—a silver dollar for every 50 cents' worth of silver so long as 
the parity is preserved — and the Government gets not a cent of it. How are 
you going to get silver dollars for the greenback-redemption fund out of the free 
coinage of silver? The Government gets nothing by such coinage. It loses, on 
the contrary, the cost of coinage, whatever it may be. Even with such coin- 
age, the only way the Government can get such silver dollars for its greenback- 
redemption fund is by issuing bonds to buy them, and if silver and gold are to 
be maintained at a parity, certainly the Government will have to pay the same 
for coined silver as for gold. 

Where, then, is the advantage to the Government and to the people who do 
not own silver bullion? It is replied that it will be found in the restoration of 
silver to its former place as a yokefellow of gold, by which this country will 
have both gold and silver freely coined and permanently concurrently in circula- 
tion as the money of the people, or, in other words, full bimetallism. 

If it be true that opening of the mints of this country alone to the free and 
unlimited coinage of private silver at the ratio of 16 to 1 would give this coun- 
try the permanent concurrent coinage and circulation of both gold and silver 
as money, which is the popular understanding of the meaning of bimetallism, 
then such coinage would be welcomed. 



10 

(SOME CONCEDED PRIXCIPIiES. 

But what is the evidence, Mr. Chairman, that the opening of the mints of this 
country to the free and unlimited coinage of private silver on. the basis of re- 
garding 16 ounces of silver the equivalent in coinage of 1 ounce of gold would 
result in bringing gold as well as silver to be coined and permanently concur- 
rently circulated, when in every market of the world 32 ouncea of silver is now 
the equivalent of 1 ounce of gold ? 

It must be conceded that under free and unlimited coinage of private silver 
bullion after a sufficient time had elapsed to give an opportunity to get into full 
operation, there could be no material difference in market value between 371^ 
grains of fine silver in the form of bullion before coinage and 371^ grains 
of silver coined into a standard silver dollar; for no owner of silver, here or 
abroad, would sell 371^ grains of silver bullion materially less than he could 
dispose of a silver dollar coined from such silver, when he could have his bul- 
lion converted into such dollar without cost to himself. This is exactly what 
is found to be the case under the free and unlimited coinage of gold. The 
gold bullion required to mint a gold dollar is worth the same before coinage as 
after. 

It follows from this that gold would not be brought to our mints for coin- 
age on the basis of regarding 1 ounce of gold as the equivalent in coinage of 
only 16 ounces of silver unless such opening should change the absolute and rel- 
ative value of gold and silver bullion in the markets of the world from the 
ratio of 32 to 1, as now exists, to the ratio of 16 to 1; or, in other words, 
should practically double the value of silver, as measured in gold. For un- 
less this miraculous change in relative value should be worked by opening 
the mints of this country alone, gold would not be taken to our mints for 
coinage, and even that already coined would be withdrawn from use as money 
and both gold bullion and coined gold would become merchandise and be sold 
and exported as such. In other words, we should be left with only silver 
as our metallic full legal-tender money and should become a silver mono- 
metalic nation on a silver basis. 

THE REAE DAXGER OF FREE COINAGE. 

Mr. Chairman, the issue between those who hold that free and unlimited 
coinage of silver at the ratio of 16 to 1 by this country alone would result in 
giving us the permanent concurrent coinage and circulation of gold and silver 
— for I am not addressing myself to those who desire silver monometalism — is 
thus narrowed doAvn to a consideration of the question as to whether such coin- 
age would so change the relative value of gold and silver in every market in 
the world as to make 16 ounces of silver the equivalent in value or purchasing 
power of one ounce of gold, when now it requires 32 ounces of silver to be 
such equivalent. Those who favor such coinage must demonstrate that this mar- 
velous change would be wrought by it before they can reasonably ask the 
people of this country to take the enormous risk of its failure. 

I trust, therefore, that in. the discussion which is now opened those who 
advocate the adoption of the policy of opening the mints of this country alone 



11 

to the free and unlimited coinage of silver at the ratio of 1© t© 1 will not spend 
their time in mere assertions and declamation about the importance of bi- 
metalism, which the country understands to mean the permanent concurrent 
coinage and circulation of both gold and silver full legal-tender money, and 
the disadvantages of monometalism, but will present to the House and country 
the grounds on which they assume that such coinage would result in giving us 
such bimetallism rather than silver monometalism. 

For myself, I never was more confident of any fact in finance than I am 
that such coinage of silver as is proposed would speedily drive gold from 
its use as money in this country and leave us with nothing but silver— in other 
words, silver monometalism— precisely as such a policy has resulted in Mexico. 
I shall listen attentively and with a receptive mind to any facts and arguments 
which may be adduced to maintain otherwise, for the reason that I heartily wel- 
come the use of silver as full legal-tender money in any manner and to any 
extent which will preserve the parity of gold and silver and give us both metals 
as our property money. By the action of our Government in the past, by the 
declarations of both the great political parties in 1892, and by the enactment of 
a law with but few dissenting votes by the last Congress, we have declared 
our purpose is to steadily seek the concurrence of a suflBcient number of leading 
commercial nations in an international agreement for the free coinage of silver 
which would make permanent full bimetallism possible. Under that law we are 
standing to-day in the attitude of asking other countries to co-operate with us 
in this movement. 

THE ARGUMENTS FOR 16 TO 1 FREE COINAGE. 

Mr. Chairman, I desire to examine as briefly as may be the arguments 
presented hy those who hold that the free and unlimited coinage of silver at 
the ratio of 16 to 1 will give this country full bimetallism, or the concurrent 
coinage and circulation of gold and silver as full legal tender money. 

The argument on which the friends of 16 to 1 free silver seem to more espe- 
cially rest is that the opening of our mints to such coinage will create an un- 
limited demand for silver at a fixed price of $1.29 per ounce — the price de- 
manded by this ratio — and this would make the market price of silver bullion in 
every market of the world. 

This would be the case if it were true that free coinage by this country 
alone would create an unlimited demand for silver at the fixed price of $1.29 
per ounce. The fallacy of the whole argument becomes apparent when it is 
considered that the demand for silver by our mints alone would not be unlimi- 
ted, but restricted to the demand of purchasers of silver dollars, and that the 
price received by the owner of silver for each 3711^4 grains is not a fixed price, 
but what a stamped standard silver dollar will exchange for in the markets 
under free and unlimited coinage. Those who accept this argument uncon- 
sciously accept the "fiat" idea that whatever the Government stamps $1 is tlioro- 
by given an exchange value to that amount, regardless of its intrinsic valuo 
or its redeemable promise to pay such value — a theory which went down in 
disgrace under our greenback experience until specie redemption was establish- 
ed in 1879. 



12 



AN ABSURD EXAGOERATIOlff. 

An absurd exaggeration of the theory of the bimetallic tie, as held by the 
scientific adyocates of bimetallism, and in which I concur, has been adopted 
by some of the adyocates of 16 to 1 free silrer, to which I desire to refer. 
This theory holds that where the unit is measured, in two metals at their com- 
mercial ratio at the time this ratio is fixed, then when one metal begins to rise 
there is an increased demand for the other metal which tends to restore the 
equilibrium io long as the conditions of ptoducftion of either metal remain substan- 
tially the »ame. But no scientific advocate of bimetallism ever held that this 
alternating demand could successfully operate except within narrow limits and 
when the coinage ratio had been established at the commercial ratio. 

It must be evident that the bimetallic tie it very weak when only a single 
nation has opened its mints, and that its power rapidly increases as the num- 
ber of nations uniting in maintaining a common coinage ratio is enlarged. It is 
for this reason that international free coinage of silver becomes the hope and 
safety of full bimetallism, while independent free coinage, especially at a ratio 
widely different from the commercial ratio, must inevitably lead to disorder and 
silver monometallism. 

Again, it is contended that the sole cause of the decline of silver was the 
closing of the mints of Europe and of the United States to its free coinage, and 
that if the mints of the United States shall be reopened immediately silver 
will assume its old relative value to gold. 

But do not those who present thii argument see that even if it be conceded 
that the sole cause of the decline of silver has been the closing of the mints of 
Europe and of the United States to its free coinage, the remedy would be not 
the opening of the mints of this country alone, but the opening of the mints of 
Europe also— in other words, international free coinage. 

THE EXAMPIiE OF FRANCE. 

Mr. Chairman, It is also argued with great confidence that the opwi mints 
of France alone maintained the relative value of gold and silver at the ratio 
of near 15% to 1 for the first seventy-four years of this century, and there- 
fore that the opening of the mints of the United States alone to the free coinage 
of silver at 16 to 1 would also change the commercial ratio of silver and gold 
bullion to 16 to 1, notwithstanding it is now 32 to 1. 

It is sufficient to say in reply that when France adopted the coinage ratio of 
15% to 1 this was the commercial ratio of silver and gold bullion ; that not only 
France, but every country in Europe maintained substantially the same coinage 
ratio; that during the first sixty years of this century the annual production of 
silver never rose above 29,000,000 ounces per annum; and that soon after 1865 
the annual production of silver began to rise abnormally, reaching 55,000,000 
ounces in 1874, when not only France, but the other countries of the Latin Union, 
to wit, Belgium, Switzerland Italy and Greece, which had joined France in open- 



13 

fug their mints to silver nine years before, were forced to close them, and 
have kept them closed against the free coinage of silver ever since. 

Surely what France, aided by the other countries of the Latin Union, wag 
unable to do in the face of the rise in the annual production of silver from 29,-i 
000,000 to 55,000,000 ounces, and a decline of only 3 cents per ounce in the 
price of silver, it would be absurd to expect the United States could do single- 
handed in the face of a rise of the annual production of silver from 55,000,000 
ounces in 1874 to 160,000,000 in 1893, and a decline of 50 cents per ounce in 
its pric& 

THE OVES&SJHADOWIS^G CAUSE OF SII.VEK DECIilNE. 

It is this abnormal increase in the production of silver in the face of a con- 
stantly declining price — indicating beyond question such a change in the condi- 
tions of mining that has greatly reduced the cost of producing silver, afteu 
making du« allowance for the effect of the closing of European minta to silver—. 
that has been the chief factor In causing the remarkable decline of silver iq 
the past twenty-two years; and, unless these conditions of silver production ma- 
terially change, it is idle to claim that if the mints of the United States could 
be opened to the free coinage of silver on the basis of 16 to 1, the old relative 
value of silver and gold which existed before these new: oonditiona came in 
would be restored. 

The assertion so frequently made that the mere legislative suspension in 
1873 of a law authoridng the free coinage of silver caused the decline of silver, 
when for twelve years prior to that time almost no silver had been coined bj) 
our mintg for circulation, affords a most remarkable illustration of the potenej| 
of a persistent iteration of an absurdity. 

The only way, Mr. Chairman, in which the closing or opening of mints to| 
the coinage of silver can bring about a rise or fall of the metal is through ai 
diminution or an increase of the demand for silver bullion. It is significant ii| 
this connection to recall that the United States ha« used five times as muchi 
silver as money in the leventeen years since 1878 as it used in the first sev-; 
enty years of the existence of this Government under the Constitution. And it 
is worthy of note also, as an indication of the comparatively small influence 
of a demand for silver by the United States alone, that notwithstanding this 
country purchased, between 1890 and 1893, 54,000,000 ounces of silver per an- 
num—substantially the American product and one-third of the product of the 
world— yet after a temporary boom silver began to fall more rapidly than be- 
fore, undoubtedly for the reason that the small increase of price at first so in- 
creased the profits of silver mining as to stimulate production more than ever. 

The fact must not be overlooked also that while it is probable that the val- 
ue of gold, which had declined somewhat under the large California and Austra- 
lian production from 1850 to 1865, rose again as the production declined after 
1865, yet since 1890 the increase of production has been greater than ever be- 
fore, rising from $118,000,000 in 1870 to $205,000,000 in 1895, with the proba- 
bility that the production this year will reach $250,000,000, which is almost twice 
the production of any year of the California period. 



14 



THE "DOIiliAR OF THE FATHERS," 

I desire, Mr. Ghairman, to eay that nothing can be more illogical and mis- 
chievous than the constant assertions which are being made, if men would but 
stop to think, about restoring what they ©all the dollar, the silver dollar of the 
"Fathers." What do you mean by that ?Do you mean to say that the coinage 
ratio of 16 to 1 ia a Divine ordination? Do you meaa to say that it is some- 
thing that has been established by the Divine will and is to be continued for 
all time? What do you mean? Why, when Christopher Columbus discovered 
America 10^ ounces of silver was the equivalent of 1 ounce of gold, and that 
being the commercial ratio, the coinage ratio was made the same in those coun- 
tries which maintained the two metals at a parity. 

Did the fathers in 1792 proceed to say, "Oh, let us restore the dollar of 
Christopher Columbus?" (Laughter). "Let us adopt a ratio of 10% to 1 in 
our coinage; because when the venerable Christoph^ discovered this country 
that was the ratio of Divine ordination." (Laughter). They drd not do anything 
of the kind. They treated the subject as common sense busings men; and 
Alexander Hamilton, Secretary of the Treasury, proceeded to do what? From 
an investigation in every market of the world he ascertained what the commercial 
ratio of gold and silver was, and he found that his investigation showed that 
it was 15 to 1. 

So the fathers adopted that ratio. In other words, they adopted the dollar 
unit, and measured this unit in the two metals at a ratio of 15 to 1 by weight, 
on the supposition that this was tke c«mmereial ratio, and therefore that both 
would be the same. What took plaee? In precess of tlm« it was discovered 
that this ratio that had been e«t&blished degartftd slightly, lew than 2 per cent., 
from the commercial ratio, and that after a time very littl© gold (gold being 
undervalued) came to the mint. So in 18S4 the sons of the grandfathers came 
forward and changed the ratio to 16 to 1, supposing that to be the then com- 
mercial ratio. They made a mistake of a very small fraction and undervalued 
silver. The result was that by 1840 very little silver was brought to the mint; 
and in 1853 we were obliged to reduce the weight of silver in our fractional sil- 
ver coins to prevent them from going out of circulation and into the melting 
pots, 

NO DIVINEI.Y ORDAINED RATIO OF ANY KIND. 

So it seems that "the fathers" of that day did not conceive the notion 
that there was a divinely ordained ratio of any kind. In adopting a ratio 
they were simply following the commercial ratio, and, so long as the commer- 
cial ratio varied but slightly, the bimetallic tie held the two metals together. 
There was less than $15,000,000 of full legal tender silver in circulation in 
1860. Less than $15,000,000! Simply from the fact that we h*»d undervalued 
feilver by our ratio of 16 to 1. From 1862 to 1873 not a dollar of either gold 
or silver was in circulation as money. Why? Simply for the reason that 
^e had established another legal tender dollar, the greenback, which depre- 



15 

dated, and cheaper money always drires out the more raluable. That is some- 
times called Gresham'fi law, but it is simply the law of business common 
sense. 

Mr. McMLLLflN. If it will not interrupt the distinguished gentleman I 
would like to ask him one question at this point. If I understand his argu- 
ment the whole tenor of it is that the increased production of silver made 
necessary the action taken by the nations of the world against the coinage of 
silyer. 

Mr. DINGLEY. I hare not said that, I hare not undertaken to say 
what influenced Germany. There are different theories about it, and I can- 
not decide between them. But w© do know that at the time Germany closed 
her mints to the free coinage of silver the silver dollar was worth three 
cents more than the gold in the gold dollar, and that is a sufficient answer 
to the assumption so often made that some people who were creditors procured 
in 1873 the suspension ^t the coinage of silver in this country in order to in- 
crease the value of their loans. If they were going to do that I should think 
they would have made silver the metal to be coined and would have demon- 
etized gold. 

Mr. McMILLIN. I would like to ask the gentleman, in this connection, 
whether it is not true that at the time of the passage of the demonetization 
act of 1873 silver was still at a premium, as it was when Germany demone- 
tized it? 

Mr. DINGLEY. Certainly. But the premium was very small, and in 1874, 
when the Latin Union closed their min ts, silver had declined nearly three 
cents. 

Mr. McMILLIN. Then the depreciated value of silver could not have 
been the cause of its demonetization. 

Mr. DINGLEY. In 1873— of course not 

Mr. CLARK, of Iowa. Did not Germany go to the gold standard because 
of the 47 different kinds of silver money that existed in that country X 

MEXICO AS AN OBJECT liESSON. 

Mr. DINGLEY. Mr. Chairman, we need not, however, rest the case on 
reason and past experience alone, for we have at our doors an object lesson of 
the results of 16^^ to 1 equal and unlimited coinage in Mexico. For years 
Mexico has tried such coinage. She avoided what is facetiously called "the 
crime of 1873." Her laws to-day permit the coinage of both silver and gold 
at the ratio of 16i^ to 1, and yet not a dollar of gold is taken to her mints 
or is found in use as money. She has only silver as her metallic money, and 
is to-day a silver monometallic country. Notwithstanding she coins a large 
amount of silver— $29,000,000 in 1893— for the reason that her coins have been 
for mans years current in China, thus making her experiment that of 400,- 
000,000 of people, yet Mexico's open mints and Mexico's demand for silver do 
not seem to have the sligbtest effect in raising the price pf silver or prevent- 
ing its fall. 



16 

There Is not a gcientific bimetallist outside of politic* in tlie whole world 
who believes that under the present conditiona any country in tha world can es- 
tablish, and open ita mints at the ratio of 16 to 1, and secure the concurrent coin- 
age and permanent concurrent circulation of the two metals. In the French 
Chamber of Deputies last winter, when this question was discussed, the French 
minister of finance declared that France stands ready, when a sufficient com- 
bination is made among the nations of the world to show that such a ratio can 
be maintained, to open her mints to free coinage; and when a member of the 
Chamber of Deputies further questioned the minister of finance, he replied that 
France was ready to unite in any movement that gave promise of bringing the 
two metals together as yokefellows under free coinage; but, added the French 
minister, it is not in the power of France alone nor in the power of the United 
States alone to secure full bimetallism unless a sufficient number of commercial 
nations shall enter into the combination to so increase the demand for silver 
as to bring the two together on a ratio that shall take into account the existing 
situation. 

Let us take up this question as a practical and scientific one, and, while 
temporarily using all the silver we can carry in parity, seek to secure such 
concurrence of nations as will bring about permanent bimetallism that will give 
us both gold and silver as our money. I am Mth you heart and hand in that ef- 
fort, but I cannot consent as a representative of the American people, having 
no personal interest at stake in this matter one way or the other excQ)t the 
^common interest of a citizen of the United States — I cannot consent to shut my 
eyes to facts that every intelligent man, if he will only open hi» eyes and ob- 
serve them, must take into careful consideration. 

CAUSE OF THE DEPRECIATION OF SIIiTER. 

Let us assume that the closing of the mints of Europe has had some effect 
in causing the depreciation of silver; but let us concede that the increased pro- 
duction of silver at a constantly reduced price has had more effect. Let us 
consider this question in a business way and then we shall not 
err. I know of no question that it is more dangerous to commit to the stormy and 
changing sea of politics than this question of money; and I deplore beyond ex- 
pression that inch a question as thi« should have been dragged into ward cau- 
cuses and conventions and treated on a purely partisau and political basis. 

Mr. Chairman, while the people of this .country generally desire to secure a 
restoration of full bimetallism whenever it can be accomplished, and maintain 
the parity of the two kinds of money, yet I believe that our people never wiU 
consent to any policy which it is believed will cause the two metals to separate, 
■will drive out gold and make us a silver monometallic country, (Loud and 
prolonged applause]^ 



JOHNSON 



ON 



Silver and Wheat 



Generally speaking, it is strictly true that the price of wheat has 
never been higher in India than in America, except when there was 
either a famine to abnormally raise prices in India or a triumphant 
Democracy to abnormally depress prices in America. Instead of 
wasting time in trying to restore the conditions of 1873, let us pray 
God to deliver India from famine, and let us help the farmers of America 
to deliver themselves from "four years more of Qrover" by undoing 
the blunder of 1892, and the ** crime of 1873 '* can safely be left to work 
out its own salvation or condemnation. 



SPEECH 



OF 



Hon. Martin N. Johnson 

OF NORTH DAKOTA 

IN THE 

House of Representatives, Washington, D. C. 



Thursday, February 6, 1896 



SPEECH 



OF 



Hon. Martin N. Johnson 

OF NORTH DAKOTA 
IN THE 

House of Representatives, Washington, D. C. 

Thursday, February 6, 1896 



The House being in Committee of the Whole on the state of the Union, and having under 
consideration the bill (H. R. 2904) to maintain and protect the coin redemption fund, and to 
authorize the issue of certificates of indebtedness to meet temporary deficiencies of the revenue- 



Mr. JOHNSON, of North Dakota, said: 

Mr. CHAIRMAN: There was a short speech made here last night by 
the gentleman from Colorado (Mr. SHAPROTH) which was a typical 
speech for those who had his views on this question. If the question 
were confined to this one subject of silver, and if all other causes which 
tended to influence the demand for silver except simply the one item of 
supply were eliminated from the calculation, then I could draw that curve 
with absolute arithmetical, scientific accuracy, as I have drawn the two 
curves representing the price and production of silver from 1873 to 1894, 
Inclusive, on this chart which you see before you. 

(NOTE.— At this point the attendants brought into the Hall some 
charts, about six feet square each, mounted on an easel in such a man- 
ner as to be visible one at a time. The easel was placed in the area im- 
mediately in front of the Speaker's desk.) 

(For Chart No. 1 see page 8.) 

The figures from which this chart is drawn are found on pages 238 
and 249 of the Annual Report of the Director of the Mint for 1895, sup- 
plemented by a table on page 45 of his 1894 report on production of gold 
and silver in the United States as to the production from 1873 to 1886. 

3 



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As a result of the act of 1S73, those who believe in free coinage assert 
that silver was "struck down," "destroyed" . and "demonetized." Pro- 
duction increased from 63,000,000 ounces in 1873 to 167,000,000 ounces 
in 1894. 

People who think that such words as "destroyed" and "struck down" 
fittingly describe such a growth in a, great industry in twenty-two years 
can consistently use the word "demonetization" in describing the changed 
condition of silver when its use as a money metal was increased from 
practically nothing to about $500,000,000 in this country. 

These men assert, and attempt to make people believe, that the law 
of 1873 caused the decline in the price of silver. Is it not possible that 
other causes may have been at work? Is it not possible that by doub- 
ling the production of silver you might reduce its value either by one- 
half or by some other fraction? On that theory the lines on the chart 
ought to cross in the year 1890. They actually , intersect in 1891. 

PRICE OF WHEAT IN INDIA. 

It has been assumed that under free coinage the price of wheat has 
remained steady in India. As a matter of fact the price of wheat has 
fluctuated up and down there about the same as here. The average 
price there has been nearly twice as high some years as others, ranging 
from 5.25 rupees per maund in 1879 to 2.70 rupees per maund in 1885. 

By the courtesy of the Secretary of the Department of Agriculture I 
have obtained table on page 4, giving the price of wheat in representa- 
tive districts of India for every year from 1873 to 1893, inclusive. 

UNITED STATES DEPARTMENT OP AGRICXJLTUURE, 

OFFICE OP THE SECRETARY, 

"Washington, D. C, February 7, 1896. 
DEAR SIR: In accordance with your request of this morning, I in- 
close herewith an exact copy of the statistics of wheat prices in India which 
formed the basis of the tabular statement transmitted to you on the 5th in- 
stant. The figures were taken from an official publication entitled Prices 
and Wages in India, compiled in the statistical branch of the finance and 
commerce department of the Indian Government. The values are given 
in terms of the silver rupees of India. 

Respectfully yours, J. STERLING MORTON, 

Secretary. 

Hon. MARTIN N. JOHNSON, 238 Maryland avenue N. E., Washington, 
D. C. 



By adding the columns in the foregoing table and dividing 
number of districts we obtain the following averages: 



1873 


3.18 


1880. . 


1874 


2.85 


1881 . . 


1875 


2.81 


1882.. 


1876 


2.88 


1883.. 


1S77 


4.22 


1884.. 


1878..... 


4.94 


1885.. 


1879 


5.25 


1886.. 



4.02 


1887.. 


3.02 


1888.. 


3.03 


1889.. 


3.15 


1890.. 


2.87 


1891 . . 


2.76 


1892.. 


3.06 


1893.. 



by the 



. .3.56 
. .3.53 
. .3.41 
. .3.17 
. .3.55 
. .3.99 
.. .3.47 



From these averages I have drawn Chart No. 5. 

(For Chart No. 5 see page 13.) 

This chart No. 5 proves to a mathematical demonstration that the 
price of wheat, measured in silver, has not remained steady in India. In 
fact, the extremes of fluctuation have been greater there than in the 
United States and in other gold-standard countries. 



In order to make the lesson of the foregoing table and chart more 
easily understood, I have reduced the India rupees and maunds to the 
equivalents in United States gold dollars and bushels. 

In making these calculations of equivalents I have availed myself of 
the extremely valuable and painstaking assistance of the accomplished 
officials of the Department of Agriculture, and take this occasion to ex- 
press my just appreciation of their kindness. 

UNITED STATES DEPARTMENT OF AGRICULTURE, 

OFFICE OF THE SECREl^ARl", 
"Washington, D. C, February 5, 1896. 

DEAR SIR: Complying with your request of yesterday, I send to 
you herewith tabular statements showing the annual exports of wheat 
and wheat flour from Argentina and Russia since 1890. These figures 
can be used to supplement the tables which you will find on pages 101-102 
and 160-lGl of the bulletin handed to you yesterday entitled "Production 
and distribution of the principal agricultural products of the world." 

I inclose also the tables you desired relative to wheat prices and agri- 
cultural wages in India. The reduction of the Indian denominations used 
in these tables to United States equivalents was more of a task than at 
first anticipated, and hence it was impossible to transmit the tables last 
night as hoped. Respectfully yours, 

J. STERLING MORTON, 

Secretary. 

Hon. MARTIN N. JOHNSON, 238 Maryland avenue N. E., Washington, 
D. C. 

By adding the columns in the foregoing table and dividing by the num- 
ber of districts we obtain the following averages: 



Average price of wheat per bushel^ in India reduced to equivalents in Unit- 
ed States gold coin. 



1873 

1874 

1875 

1876 


$1.05 

92 

86 

89 

1.24 

1.47 

1.48 


1880 

1881 

1882 

1883 . . . . 


$1.14 

86 

86 

88 


1887 

1888 

1889 

1890 


$0.90 

85 

80 

76 


1877 

1878 


1884 

1885 . 


80 

. . . 76 


1891 

1892 

1893 


90 

89 


1879 


1886 


79 


68 



From these averages I have drawn Chart No. 2, and for the purpose 
of comparison I have also placed on the same chart the curve which 
appears on Chart No. 4, giving the price of wheat in the United States 
for the same period. 

(For Chart No. 2 see page 10.) 

Prices of wheat have sometimes been higher in India and sometimes 
in America. 

The fact of these ups and downs admits of no dispute. The only room 
for disagreement is as to the causes which produced them. 

Our opponents teach and affect to believe that one cause, and only one 
cause, viz., the "crime of 1873," has produced all these ups and downs. 
We believe and teach that very many causes and forces may have com- 
bined to produce the result. Wheat was very high in India from 1877 to 
1880. That is a fact. But the farmers of India had no wheat for sale 
during those four years of the "great famine," when in some instances 
they ate human flesh for want of wheat bread. In my judgment the fam- 
ine was quite sufficient to account for the price of wheat. 

Wheat was low in the United States from 1884 to 1888, and again 
these last three years of grace. 



6 



That is a fact. It is also a fact that Mr. Cleveland was President of 
the United States during those years. Generally speaking, it is strictly 
true that the price of wheat has never been higher in India than in Amer- 
ica except when there was either a famine to abnormally raise prices in 
India or a triumphant democracy to abnormally depress prices in Ameri- 
ca. (Applause.) Instead of wasting time trying to restore the conditions 
of 1873 let us pray God to deliver ndia from famine, and let us help the 
the farmers of America to deliver themselves from "four years more of 
Grover" by undoing the blunder of 1892, and the "crime of 1873" can 
safely be left to work out its ov/n salvation or condemnation. (Applause.) 

If there were any substantial advantage to be gained by exchanging 
wheat for rupees or for cheap 'Mexican free-coinage silver dollars, the 
American farmer could easily exchange his good American gold dollars 
for any of these cheap coins, and he would get just as many rupees or 
Mexicans for a bushel of wheat as his competitors. Up to this point 
they would be on an equal footing. The only difference in final results 
would depend on relative smartness in getting rid of the rupees. 

THE JUST WAGES OF HONEST TOIL. 

The farmer in India might be more successful in cheating the poor la- 
boring man out of the just wages of honest toil than would be possible 
in America, That I admit. Depreciated money always hits the laborer 
first and hardest, and the more ignorant he is the more he is hit. But 
when it came to paying out the part that goes to the merchant, the bank- 
er, and the railroad man it is not very likely that the ordinary farmer, 
either in India or America, would rob the party of the second part in 
the transaction to any alarming extent. But enough of India. Let us 
now turn to matters nearer home.' 

It is extremely fashionable to assert that since 1873 it has gradually 
become harder and harder for the laboring man and the farmer to ac- 
quire gold or to pay debts. I admit that it has been harder to get gold 
to pay debts now, since 1892, than it ever was before. 

The same may have also been the case in a lesser degree during the 
first four years of Grover. But during the years of Republican suprema- 
cy exactly the reverse was true. The improvement was not regular and 
steady, but it was nevertheless a distinct advance. 

Speaking now as a Republican and as a representative, glad to ren- 
der an account of my stewardship and the stewardship of my party dur- 
ing the thirty years when the party was charged with responsibility for 
the prosperity of the people and the glory of the Republic, I make the 
statement without fear of successful contradiction that the last and thir- 
tieth year of the thirty years of Republican supremacy was the best year 
in all our history for the laborer and for the farmer, and that was the 
year of years, before or since, when it was easiest to get gold to pay 
debts. 

That this was true in the case of the farmer I shall attempt to prove 
by a mathematical statistical demonstration. 

On page 6 of the last annual message of President Harrison, sent to 
Congress December 5, 1892, you will find this statement: 

"There never has been a time in our history when work was so abtin- 
dant or when wages were so high, whether measured by the currency Ic 
which they are paid or by their power to supply the necessaries and com- 
forts of life." 



CHART NO. 


1.- 


-Report of the Directo 


r of the Mint tor 1895 (Pages 238-249.) 


!'/ Trt a 


130 




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We were: more prosperous in 1892 than in 1872. We now have hard 
times and have had hard times for three years, but in casting about for 
cause and remedies of all our ills it is utterly futile to compare the pres- 
ent with the less prosperous period of 1872 rather than with the more 
prosperous period ending in 1892. Whatever cause produced the present 
result commenced to operate and showed its effects after 1892 and not 
1S72. 

WHEAT AND SILVER. 

It is a favorite sophistry with our friends on the other side to say that 
"wheat is cheaper now than in 1873." "Silver was destroyed, struck down 
and demonetized in 1873," "therefore the fall of silver caused the fall of 
wheat." 

The trouble with that is that the fall in price of wheat has all, or 
nearly all, taken place since 1891. 

The average farm price of wheat was S3 cents in 1891, and the sar*^ 
in 1890, and 92 cents in 1888, in gold while in 1874 it was 94 cents in pa- 
per currency, equal to 34 cents in gold. (See Chart No. 4.) 



ij 



When was the wheat farmer most prosperous? 

Answer. — He got the biggest average price per bushel in 1881, and the 
biggest pile of gold per acre in 1891. 

In proof of the foregoing statement I submit the following table, found 
on page 6 of the Monthly Crop Report for December, 1895, United States 
Department of Agriculture. 

Production, value, price, and exports of wheat since i88o. 



Years 


Total area 
of crop 


Total produc- 
tion 


Total value 
of crop 


Average 

value 

per 

bushel 


Average 

yield 
per acre 


Average 

value 

per acre 


Exports for fiscal 

years beginning 

Julyl 


1880 


Acres 
37,986,717 
37,709,020 
37,067,194 
36.455,593 
39,475,885 
34,189,216 
36,806,184 
37,641,783 
37,.336.1.38 
38,123.859 
36,087,1-54 
39,916,897 
88,554,430 
34,629,418 
34,882,436 
34,047,332 


Bushels 
41)8,-549,868 
383,280,090 
504,185,470 
421,086,160 
512,765,000 
a57, 112,000 
457,218,000 
456,329,000 
415,868,000 
490,560,000 
399,262,000 
611,780.000 
515,949,000 
396,131,725 
460,267,416 
467,102,947 


$474,201,850 
456,880,427 
444,602,125 
383,649,272 
3-30,862,260 
275,320,390 
314,226,020 
310,612,960 
385,248,0-30 
342,491,707 
334,773,678 
513,472.711 
322,111,881 
21.3,171,381 
225,902,02-5 
237,938,998 


Cents 
95.1 
91.2 
88.2 
9U 
64.5 
77.1 
68,7 
68.1 
92.6 
69.8 
83.8 
83.9 
62.4 
53.3 
49.1 
50.9 


Bushels 
13.1 
10.2 
13.6 
11.6 
13. 
104 
12.4 
12.1 
11.1 
12.9 
11.1 
153 
13.4 
11.4 
13.2 
13.7 


^2.48 
12.12 
11.99 
10.52 
8.38 
8.05 
8.54 
8.25 
10.-32 
8.98 
9 28 
12.86 
8.35 
6.16 
6.48 
6.90 


Bushels 
186,321,514 
121,892,389 
147,811.316 
111,-534. 182 
132,.570,367 

94,-565,794 
1.53,804,970 
119,625.344 

88,600,743 
109,4-30,467 
106,181,316 
22-5.665.812 
191,912,635 
164,283,129 
144,812,718 


Per 

Cent. 

37 4 


1881 


31 8 


1882 


29.3 


1883 


26 5 


1884 


25 9 


1885 


26 5 


1886 


33 2 


1887 


26 3 


1888 


21.3 


1889 


22 6 


1890 


26 9 


1891 


36 2 


1892. 


37 5 


1893 


41 5 


1894 


31 4 


1895 











[For Chart No. 3 see page 13.' 

From the foregoing table I have drawn Chart No. 3. The figures on 
the table and on the chart are for December each year. 

Notice the tremendous drop in December, 1884, and in December, 1892, 
immediately following each of Mr. Cleveland's elections. Notice the 
dead level of low prices during the first "four years" and present three 
years of Grover. 

Notice the prompt response of the wheat market to the election of Mr. 
Harrison in 1888. The wheat market promptly discounted the future, as 
markets always do, without waiting for the ceremony of inauguration day. 

These changes in the price of wheat followed immediately after elec- 
tions in 1884, 1888 and 1892. 

Unless God repeals the laws of nature and of economics, similar re- 
sults may be looked for in December, 1896. That is the only hope of re- 
lief I know of for the wheat farmer. 

All other ground 
Is sinking sand. 

Notice in the table and on the chart how remarkably even the area 
runs — between thirty-four and thirty-nine million acres. 

The biggest pile of gold for the whole crop and the biggest pile of gold 
per acre was got in 1891. 

Five crops under Grover (1884,1885, 1886, 1887 and 1892) were market- 
ed near the eight dollar per acre mark. 

Only one crop (1889) was ever marketed under Republican auspices for 
less than $9 per acre, and that lacked only 2 cents of the .nne dollar mark. 

The other three crops marketed under Grover (1893, J.S94 and 1895) 
have gone glimmering at $6.16, $6.48, and $6.99 per acre, respectively. 

The wheat farmers are not unreasonable. They do not expect to get 
rich out of one or two years' work, but they do expect to get a decent 
living and a moderate profit on their capital and labor. This they have 
not had for the last three years. 

9 



CHART NO. 2.— Official British India Blue Book. Figures reduced to dol- 
lars and bushels by United States Department of Agriculture, Febru- 
ary 5. 1896. 



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It is very difficult to compute the exact cost of raising- an acre of 
wheat. It costs more in some States than in others, more on some farms 
than on others, and more on some fields than on others, even on the same 
farm. 

But I think farmers of experience will generally agree that it cannot be 
raised for less than $6 per acre. If so, there has been no profit on the 
average in raising wheat for the last three years. Some have gained, but 
others have lost. Last November I published the following table, giving 
as near as I could the expense per acre of raising wheat in 1895 on three 
separate fields on my own farm. 



Plowing . 
Seeding... 
Dragging 
Seed 



Cutting and binding , 

Twine 

Shocking , 

Thrashing 

Interest and taxes 



Total I. 



First 
field 



S1.25 
.50 
.25 
.75 
.75 
.25 
.50 
3.24 
1.00 



S8.49 



Second 
field 



$1.25 
,50 
.25 
.75 
.75 
.25 
.50 
2.70 
.60 



S7.55 



Third 
field 



81.25 
.50 
.25 
.75 
.75 
.25 
.50 
4.14 
1.00 



Having a railwaj^ station on my farm, I allow nothing for hauling to 
the railroad. This item is often as high as a cent a mile per bushel. My 



10 



lands range from $4 to $10 per acre in value, which makes the item for 

interest very much below the average. 

Without specifying items, one may safely say that it is very much 
cheaper to raise wheat now than in 1873, mainly on account of the inven- 
tion of the self-binder. 

It is also reasonable to assume that the farmer ought to get from 
$9 to $12 per acre for his wheat crop, as he always did under Republican 
rule, the lowest being $8.98, in 1889, and the highest being $12.86, in 1891. 
With that he would be prosperous and happy. The conditions of 1881 and 
1891 can be restored. The conditions of 1873 can no more be restored 
than you can turn back the world in its history or the earth in its orbit. 

"Turn the other way, boys," as Sheridan said. Victory and prosperity 
do not lie in the direction of stampeding people after India rupees, Mex- 
ican 50-cent dollars, or any other kind of cheap free-coinage money. Es- 
pecially do I appeal to you young, bright and brave men of the Republican 
party not to concede as if it were true what is absolutely false as to the 
glorious achievements of the prosperity which took its flight not in 1873 
but in 1892. Let not the G. O. P. discover you among the crowd of as- 
sassins and regretfully have to say, "Thou too!" 

I have gone into this subject of wheat thus at length and in detail 
because it has been more than any other the favorite target for the silver 
lance. I have also had prepared at the Department of Agriculture a ta- 
ble, giving the farm prices of corn, wheat, rye, oats, barley, buckwheat, 
potatoes, and hay in December of each year from 1870 to 1895. 



UNITED STATES DEPARTMENT OP AGRICULTURE, 

DIVISION OF STATISTICS, 
^Washington, D. C, February 4, 1896. 
DEAR SIR: I have the honor to hand you statement of the farm 
prices of principal agricultural products, as promised in our conference of 
to-day. Very respectfully, 

HENRY FARQUHAR, 
Hon. M. N. JOHNSON, Acting Statistician. 

House of Representatives. 

Average farm-price for the United States of corn, wheat, rye, oats, barley, buckwheat, potatoes 
and hay in December of each year from 1870 to i8gs, inclusive. 



Year 



1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1888 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 



Corn 


Wheat 


Eye 


Oats 


Barley 


Buck- 


Hay 


Potatoes 


per 


per 


per 


per 


per 




per 


per 


bushel 


bushel 


bushel 


bushel 


bushel 


bushel 


ton 


bushel 


$0,549 


$1,042 


$0,815 


$0,433 


$0,845 


$0,784 


$13.82 


$0,720 


.482 


1.258 


.790 


.401 


.806 


.828 


15.82 


.596 


.398 


1.240 


.763 


.336 


.738 


.829 


14 53 


.599 


.480 


1.150 
.944 


.762 
.856 


.374 
.520 


.915 
.921 


.814 

.808 


13.67 
13.73 




.647 


.677 


.420 


1.000 


.769 


.365 


.811 


.710 


12.27 


.389 


.370 


1.037 


.669 


.351 


.664 


.726 


9.74 


.655 


.358 


1.082 


.592 


.292 


.639 


.687 


8.60 


.448 


.818 


.777 


.526 


.346 


.580 


.527 


7.21 


.589 


, .375 


1.108 


.656 


.331 


.589 


.598 


9.32 


.436 


.396 


.951 


.756 


.360 


.666 


.594 


11.65 


.483 


.636 


1.193 


.933 


.464 


.823 


.865 


11.82 


.909 


.484 


.882 


.615 


.375 


.628 


.729 


9.70 


.557 


.420 


.910 


.580 


.330 


.587 


.820 


8.19 


.420 


.857 


.645 


.519 


.280 


.487 


.589 


8.17 


.396 


.328 


.771 


.579 


.285 


.563 


.559 


8.71 


.447 


.366 


.687 


.538 


.298 


.536 


.545 


8.46 


.467 


.444 


.681 


.545 


.304 


.519 


.565 


9.97 


.682 


.341 


.926 


.591 


.278 


.596 


.636 


8.76 


.402 


.283 


.698 


.457 


.230 


.427 


.518 


7.88 


.403 


.506 


.838 


.629 


.424 


.648 


.577 


7.74 


.777 


.406 


.839 


.774 


.315 


.540 


.579 


8.39 


.371 


.393 


.624 


.548 


.317 


.472 


.534 


8 49 


.673 


.365 


.538 


.513 


.294 


.411 


.583 


8.68 


.590 


.457 


.491 


.501 


.324 


.442 


.556 


8.54 


.536 


.264 


.509 


.440 


.199 


.337 


.452 


8.35 


.266 



11 



From the foregoing table I have selected wheat, corn, oats and hay 
for representation on Chart No. 4. 

(For Chart No.4 see page 14.) 

This chart proves that prices of these farm products did not fall from 
December, 1878, to December, 1891. 





1878 


1891 


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Whatever injury was -^one to the farmer by falling prices was done 
either while we were under the spell of cheap paper money previous to 
December, 1878, or else after the Republicans lost control of the country, 
when the crop of 1892 went to market in December, 1892, under the shad- 
ows of tariff reform. 

Those fourteen years from 1878 to 1892 cover the only period and the 
entire period in the history of our country when the two cardinal doc- 
trines of the Republican party, viz. — 

First. Protection to American industries; and 

Second. Sound money — 
had a chance to do their perfect work. The record for those three years 
is made up. They were the years of our greatest prosperity. The truths 
of history cannot be obscured or obliterated. 

Distort it as you will, the fact remains that the thirtieth year of the 
thirty years of Republican supremacy was the best year in all our coun- 
try's history. That was the year when it was the easiest for the laborers 
and wheat farmer to earn gold or to pay debts with the products of his 
toil. (Applause.) 



12 



CHART NO. 3.~-Crop Report, Agricultural Department, for December, 1895. 

(Page 6.) 



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CHART NO. 5.— Silver rupees. Average annual price of wheat, first sort, 
per Indian maund, in selected districts of Western India. From "Prices 
and wages in India," an official document compiled in the statistical 
branch of the finance and commerce department of India. Calcutta, 
1894. 



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. 



McCLEARY 

ON 

Silver and Gold 

WAGES AND PRICES 



History, Science and Common Sense 
All Argue for Honest Money 



No Connection between Silver and Average Prices 



EXTRACT FROM THE SPEECH OF 

Hon. J. T. McCleary 

OF MINNESOTA 
In the House of Representatives, Washington, D. C. 

1896 



If I were called upon to characterize in a sentence the speech of my 
colleague, I should say that it lacks comprehensive grasp of the several 
topics considered. It offers a superficial view of many things, but does 
not indicate thorough study of any. We are given a little (and some- 
times very little) of the truth on many points, but not enough of the truth 
on any of them to warrant one in drawing important conclusions. To carry 
out the figure of the poet we are asked to judge of the appearance of an 
elephant by grasping its tail, to form our conception of a camel by seiz- 
ing its leg, and so on through the menagerie. 

I shall show that the gentleman's fundamental positions are based on 
half truths, which every one knows are more dangerous and misleading 
than utter falsehoods. 

SILVER AND PRICES. 

By means of a chart he endeavored to prove three things: 

1. That, beginning with 1873, there has been an "unexampled and 
ruinous fall" in the prices of commodities. 

2. That there has been during the same years a practically parallel 
fall in the price of silver, and that silver is, therefore, an almost ideal 
measure of value. 



3. 'that this "fall in prices" has been the result of the so-called "de- 
monetization" of silver, and, by inference, that "remonetization" of silver 
would "restore prices" to their former level or thereabouts. 

The trouble with my colleague U one that is common to the whole 
tribe of free silyer men. The year 1873 is to them what the year of the 
hegira is to the Mohammedan — it is the point of time from which every- 
thing is reckoned. But no legitimate inference can be drawn in relation 
to these matters without examining also the course of events before 1873, 
and making ^ fair comparison of the two series of facts. 

THE COURSE OF AVERAGE PRICES. 

The chart to which I now invite the attention of the committee is 
one that I drew since the speech of my colleague was delivered. It 
shows the course of average prices by ten-year periods from 1818-27 to 
1885-94, inclusive. The table from which it was drawn was prepared by 
Augustus Sauerbeck, one of the authorities quoted by my friend in an- 
other part of his speech. Indeed, in the first rehearsal of this speech, 
as delivered by him in Duluth last August, and afterward in other places, 
the gentleman printed this table. But, by a singular oversight, he did 
not put it into chart form. This was a very unfortunate omission, for 
had my friend appreciated the great importance of those figures, .had he 
given them enough study to become impressed with their real signifi- 
cance, and had he then put them into chart form and placed the chart 
In juxtaposition with the one considered by us a moment ago, he would 
have saved himself and his readers from grievous error. 

NOT THE BEGINNING OF A FALL. 

Mr. Sauerbeck's standard of comparison, or 100 per cent, line, is "the 
average price in London for forty-five principal commodities for the 
period 1867-77" — that is, for a ten-year period, havi' 1873 as its mid- 
dle point. 

Even the most casual examination of the chart will reveal three facts 
which are exceedingly important in this discussion — namely: 

1. That in a period extending from 1818-27 to 1843-52, twenty- 
five years, the fall in average prices was practically the same as that 
which has taken place since 1873. And had the table extended back ten 
years further the former fall would be seen to have been much the 
greater, for prices ranged much higher for some years before 1818 than 
in that year. A glance at the chart will substantiate this statement, for 
the price line in 1818 shows that it m^arks, not the beginning of a fall, 
but one which had been for some time in progress. 

Thus we see, Mr. Chairman, that our recent fall in prices is by no 
means "unexampled" in either scope or duration. It was greatly exceed- 
ed in both respects by the fall in prices near the beginning of the cen- 
tury, during the so-called "bimetalli3" period. And th\is disappears the 
chief foundation of my colleague's entire argument and of the whole free 
silver contention. 

2. The chart is equally severe on another very touching argument of the 
free silverites. Silver and its advocates are very sympathetic, very 
anxious to ameliorate the sad condition of men. Silver is claimed to be 
able and willing to "restore prices." But it is well worthy of note, Mr. 
Chairman, that during the long period from 1809 to 1865, a period mark- 
ed first by a tremendous fall and then by a great rise in prices of commo- 
dities, the price of silver varied but slightly. Though silver advocates 
frequently boast of this uniformity in the price of silver they never put 
it in connection with this other fact. Thus it is never revealed by them 



McCLEARY*^, A. 





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that during this long period, when silver had ''free access to the mints,** 
it held itself aloof from other commodities, impotent alike to prevent 
their fall or to promote their rise. 

FALL IN PRICES WAS BETWEEN 1865 AND 1873. 

3, We note, in the third place, that the recent fall in prices did not 
begin in 1873, but in 1865. When those who are trying to foist upon 
this country the unlimited coinage of silver as a panacea for all our ills, 
real and imaginary, seek to establish their position by statistics of aver- 
age prices and 'by giving the prices of certain great commodities like wheat 
and cotton, why, in the name of candor, do they not go back at lea%t 
a few years fu/ther and show that, in relation to some of the most im- 
portant items quoted, the fall in prices between 1865 and 1873 double 
discounted anything in the way of a fall that has taken place since 1873, 
that it was greater in those eight years than in all the years since? 
Why, for example, don't they remind the cotton planter that the price of 
middling cotton fell from $1,015 a pound in 1864 to less than 17 cents in 
1871? Do they not possess adequate information on vital points? Or are 
they willingly suppressing a portion of the truth, having a lively apprecia- 
tion of the fact that this simple statement would be sufficient to overturn 
their entire contention? 

FALL DID NOT BEGIN IN 1873. 

And now, Mr. Chairman, having shown by my colleague's own figures 
that the fall in prices about which he and other free silverites say so much 
Is not the only one or even the great one of this country; that it did not 
begin in 1873, and hence is not due to the cause to which they ascribe 
it; and that "free silver," having demonstrated in the past its incom- 
petency to affect prices (even if that had been shown to be desirable), 
cannot reasonably be expected to affect them in the future — ^these things 
having been proved, Mr. Chairman, our side can fairly rest our case 
and demand the judgment of all candid men. 



WHAT CAUSED THE TWO GREAT FALLS IN 
AVERAGE PRICES 

Taking the century as the period for investigation, and reverting: 
again to my chart for the course of prices, let us try to discover the rea- 
sons for those mighty changes in the level of prices. 

We note first of all that there have been in this century two periods 
of very high prices and two periods of gradual fall in prices. Can any 
principle or law be discovered In accord-ance with which these changes in 
price levels took place? If so, it is very pertinent to this discussion. 

Let us see if the two periods of high prices have anything in common. 
The first of these periods extended from 1789 to 1814, with its highest 
point at 1809. It is very important to remember that these were the 
years of the Napoleonic wars, which cost Europe so much in blood and 
treiasure. It is noteworthy, also, that the second period of very high 
prices covers the years of great wars, the Crimean in the early fifties, 
our own mighty conflict in the early sixties, followed in the later sixties 
by the war between Prussia and Austria, and in 1870 by the Franco* 
Prussian war. 



ABNORMAL DEMAND CAUSED BY WAR. 

Now war is a great destroyer of property, while at the same time tt 
takes from the productive industries vast numbers of their best workmen. 
It is a time of abnormal demand coincident with abnormally restricted sup- 
ply, hence a period marked by great wars is always a period of abnormal- 
ly high prices. 

What, on the other hand, Is the natural and legitimate effect on prices 
produced by a long period of peace? 

Every person within the sound of my voice has as one of his proper 
ambitions the acquirement of a competency for his old age. Now, Mr. 
Chairman, what is the rational basis for such a hope? In its ultimate 
analysis it is this: That each month and each year th(,> person entertaining 
such a hope shall produce more than he con?dmes. This is the basis of 
increase in wealth, personal and naticnaL 

PRICE DEPENDS ON SUPPLY AND DEMAND. 

Now price depends chiefly on two things: 1, the relation between de- 
mand and supply, and, 2, cost of production. It therefore follows that in 
a long period of peace, when production naturally exceeds consumption 
and when the wit of man is free to exercise its ingenuity in devising 
new and better methods of production, prices naturally fall. Thus it 
has been through all the ages, and thus will it ever be. Following the 
Napoleonic wars at the beginning of the century, and following the 
Franco-Prussian war of 1870, came long periods of peace, accompanied 
by the usual fall in average prices. 

If peace conditions are normal, three incidental results should appear, 
and all of them have appeared: 

1. There should be improvement in the standard of living. This im- 
plies 

2. That a given amount of labor s hould bring larger returns in the 
comforts of life, and 

3. The demand for more and better things to eat should show itself 
In sustained prices for those better foods whose productions cannot be in- 
creased indefinitely. 

WHAT SOETBEER'5 SUMMARY SH0W5. 

Pushing this investigation a little further, let us find out what arti- 
cles have been most affected by the fall in prices. 

The price tables of Dr. Adolph Soetbeer, the great. German statisti- 
cian, are justly regarded as high authority. Let us see- what they show 
when considered, as he himself sums them up, by groups. The numbers 
in the following table are his index numbers, with 1847-50 prices as a 
base or 100 per cent: 

1866-1870. 1881-1885. 

Products of agriculture, etc 137.74 130.77 

Animal and fish products 136.35 150.65 

Southern products, etc 121.54 134.41 

Tropical products 118.32 119.91 

Minerals and metals 95.47 81.55 

Textile materials.... 129.17 96.65 

Miscellaneous 105.90 91.11 

f9\;irteen Priti^h manufactured articles 130,55 103.2^ 





FOOD PRODUCTS ADVANCED, MANUFACTURED 
PRODUCTS FELL. 

Dividing the above table into two equal parts, we observe that the 
price of the first four (which are chiefly food products) were marvel- 
ously sustained and even advanced, while the prices of the second four 
(in the production of which labor saving- machinery are largely used) 
show a marked fall. 

The Soetbeer tables evidently do not warrant the statement so often 
made, with them as alleged authority, that "there has been a general 
fall in prices," if by that expression is meant that all articles or groups 
of articles have fallen largely and in a measure equally. 

PRICES NOT GOVERNED BY VOLUME OF MONEY. 

It is accepted as axiomatic by many that the volume of money in a 
country governs prices there, and, at first glance, this seems reasonable. 
But even a little study of the subject shows that such a view is untenable. 

In 1800, when we had a period of high prices, our volume of money in 
circulation was $26,500,000. As our population was then 5,308,483 we had 
only $4.99 per capita. In 1847, when prices were much lower, we had 
money in circulation amounting to $10.59, or more than twice as much 
proportionally as in 1800. 

In 1865, when we had inflated war prices, the volume of money in 
circulation amounted to $20.57 per capita, while in 1894. when average 
prices were much lower, the money in circulation was $24.28 per capita. 

ARE PRICES 100 TIMES HIGHER IN FRANCE THAN 
IN GREECE? 

The total volume of money in circulation in France to-day amounts to 
$35.77, while that of her neighbor, Switzerland, is only $9.97 per capita. 
Does any one believe that the prices in France are four times as high 
as in Switzerland? Taking gold money as the basis of comparison, France 
has $22.19 per capita, while Greece has only 23 cents per capita. Does any 
one believe that prices in France are a hundred times as high as in 
Greece? As a matter of fact, they are almost identical. 

Tooke, in his monumental work on "History of Prices," truthfully sums 
the matter up as follows: 

"There is not, as far as I have been able to discover, any single com- 
modity in the whole range of articles embraced in the most extensive 
list of prices, the variations of which do not admit of being distinctly 
accounted for by circumstances peculiar to it. * * * Circumstances do 
frequently operate with such force as to reduce prices in the face of an 
expanding currency and to advance prices when the currency is diminish- 
ing. In point of fact, the expansion is frequently rather an effect than 
a cause of enhanced prices." 

PRICES THAT DO NOT NEED "RESTORING.** 

The United States Statistical Abstract deservedly ranks high as an 
authority. Opening the latest edition (1894) at page 417, I find the ex- 
port price of mess beef quoted at 7 cents in 1872, at 8.9 cents in 1882, 
and 5.7 cents in 1892. Butter in 1872 is given at 19.4 cents, in 1882 at 
18.6 cents, and in 1892 at 19 cents. Prices of eggs for the same dates 
are 20.3 cents in 1872, 20.9 cents in 1882, and 23.2 cents in 1892. Other 
great staples, like corn, pork and ard, show equal firmness. The prices 
of these articles don't seem to need any "restoring." 

But perhaps the free silver men would like to apply their "restorer" to 
the price of refined sugar, which cost 12.6 cents a pound in 1872 and only 



I 



rtlHi5 «'A.iir<£ i'r. f=^e>AA :7bH3«A&<a>i4j 



That is a fact. It is als© a fact that Mr. Cleveland was President of 
the United States during- those years. Generally speaking-, it is strictly 
true that the price of wheat has never been higher in India than in Amer- 
ica except wh^n there was either a famine to abnormally raise prices in 
India or a triumphant democracy ro abnormally depress prices in Ameri- 
ca. (Applause.) Instead of wasting time trying to restore the conditions 
of 1873 let us pray God to deliver India from famine, and let us help the 
the farmers of America to deliver themselves from "four years more of 
Grover" by undoing the blunder of 1892, and the "crime of 1873" can 
safely be left to work out iti own salvation or condemnation. (Applause.) 

If there were any substantial advantage to be gained by exchanging 
wheat for rupees or for cheap Mexican free-coinage silver dollars, the 
American farmer could easily exchange his good American gold dollars 
for any of these cheap coins, and he would get just as many rupees or 
Mexicans for a bushel of "wheat as his competitors. Up to this point 
they would be on an equal footing. The only difference in final results 
would depend on relative smartness in getting rid of the rupees. 



THE JUST WAGES OF HONEST TOIL. 

The farmer in India might be more successful in cheating the poor la- 
boring man out of the just wages of honest toil than would be possible 
in America. That I admit. Depreciated money always hits the laborer 
first and hardest, and the more ignorant he is the more he is hit. But 
when it came to paying out the part that goes to the merchant, the bank- 
er, and the railroad man it is not very likely that the ordinary farmer, 
either in India or America, would rob the party of the second part in 
the transaction to any alarming extent. But enough of India. Let us 
now turn to matters nearer home. 

It is extremely fashionable to assert that since 1873 it has gradually 
become harder and harder for the laboring man and the farmer to ac- 
quire gold or to pay debts. I admit that it has been harder to get gold 
to pay debts now, since 1892, than it ever was before. 

The same may have also been the case in a lesser degree during the 
first four years of Grover. But during the years of Republican suprema- 
cy exactly the reverse was true. The improvement was not regular and 
steady, but it was nevertheless a distinct advance. 

Speaking now as a Republican and as a representative, glad to ren- 
der an account of my stewardship and the stewardship of my party dur- 
ing the thirty years when the party was charged with responsibility for 
the prosperity of the people and the glory of the Republic, I make the 
statement without fear of successful contradiction that the last and thir- 
tieth year of the thirty years of Republican supremacy was the best year 
in all our history for the laborer and for tlie farmer, and that was the 
year of years, before or since, when it was easiest to get gold to pay 
debts. 

That this was true in the case of the farmer I shall attempt to prove 
by a mathematical statistical demonstration. 

On page 6 of the last annual message of President Harribon, sent to 
Congress December 5, 1892, you will find this statement: 

"There never has been a time in our history when work was so abun- 
dant or when wages were so high, whether measured by the currency in 
which they are paid or by their power to supply the necessaries and com- 
forts of life." 



of those things in the production of which anything like the same amount 
of labor must be expended have held their own or have increased, while 
things, and these are very numerous, in the making of which labor-saving 
inventions and machinery have been introduced have greatly fallen in price. 
This accounts for the fall in "average prices," about which so much has 
been said. 

CLINCHING A FACT. 

Mr. HOPKINS— Your argument, then, is that the things which ought to 
have been reduced in price since 1873 have been reduced, while the things 
that ought to have increased in price have increased. 

McCLEARY, of Minnesota, — My friend from Illinois has, with his usual 
clearness, stated the case tersely and well. 

The lower prices result from the reduced cost of production. There 
is not the slightest evidence that the so-called "demonetization" of silver 
had anything to do with it. And the sure proof is that the reduction of 
cost of production has been accompanied by an increase in the wages of the 
producer. 

THE CAUSE AND RESULT OF LOWER PRICES. 

The great staples of the world are cheaj)er because it takes less human 
labor to produce them. "Every new railroad and steamboat, every labor 
saving machine and improved process of manufacture, increases the grasp 
which labor holds on the desirable things of the world." 

And thus we see, Mr. Chairman, that the great fall in prices of manu- 
factured articles during the last third ,of a century has been in the main 
perfectly legitimate, and that its Ultimate result will be most beneficent. Ta- 
ken in connection with the rise in wages, it measures man's vastly in- 
creased command over the forces of nature. 

These wonderful results have come as the beneficent fruitage of man's 
inventive genius in devising labor saving machinery, of the marvelous new 
forces which men are harnessing for the service of the human family, of 
the remarkable improvement in modern facilities for transportation and of 
the stoppage of the tremendous and cruel waste of war. 

NATURAL LAW. 

What will a day's work produce? This is the true test of progress. 
As prices decline compared with the reward of human labor the condition 
of the people is elevated. This is a process of natural law and a phase of 
evolution. Men struggle against it only because they do not understand it. 
Like all movements onward, it brings temporary hardship to individuals 
here and there. But for the vast mass of humanity it is bringing emanci- 
pation from want and the promise of that golden future when a minimum 
of time will be required to provide for the necessities that are simply phys- 
ical and temporal, thus leaving time and opportunity for the cultivation of 
those elements in our nature that are spiritual and eternal. 

THE WORLD'5 PRODUCTION AND USE OF SILVER. 

My colleague's chart, probably without any such intention on his part, 
is very misleading on two points of vital importance, in that it represents 
the production or average bulk of silver as constant and that of gold as 
having greatly diminished since 1870. How very misleading this is will be 
seen by the following table, taken from the report of the Director of tb^ 
^int, pages 248-9: 



Pioductien of gold and silver in the world since the discovery of /America. 
[From 1493 to 1885 is from a table of averages compiled by Dr. Adolph Soetbeer. For the years 
to 1894 the production is the annual estimate of the Bureau of the Mint.l 



Period 


GOLD 

Annual average for period 


SILVER 

Annual average for period 




Ounces, fine 


Value 


Ounces, fine 


Coining value 


1493-15^) 


186,470 

230,194 

273.596 

219,906 

237.267 

273,918 

266,845 

281,955 

297,709 

346,095 

412.163 

613,422 

791,211 

665,666 

671,948 

571,563 

367,957 

457,044 

652,291 

1,760,502 

6,410,324 

6,486 262 

5,949,582 

6,270,086 

5,591,014 

5,543,110 

4,794,755 

5,13.'5,679 

6,116,861 

5,330,775 

5,973,790 

5,749,306 

6,320,194 

7,102.180 

7,609,242 

8,705,836 


$3,855,000 

4,759,000 

5,656,000 

4,546,000 

4,905,000 

5,662,000 

5,516,000 

5,828,000 

6,154,000 

7,154,000 

8,520,000 

12,681,000 

16,356,000 

13,761,000 

11,823,000 

11,815,000 

7,606,000 

9,448,000 

13,484,000 

36,393,000 

132,513,000 

134,083,000 

122,989,000 

129.614,000 

115,577,000 

114,586,000 

99,116,000 

106,163,900 

105,774.900 

110,196,900 

123.489,200 

118,848,700 

180,650,000 

146,815.100 

157,297,000 

179,965,600 


1,511,050 

2,899,930 

10,017,940 

9,628 925 

13,467,635 

13,596,285 

12,654,240 

11,776,545 

10,834,550 

10,992,085 

11,432,540 

13,863,080 

17 140,612 

20,985,591 

28,261,779 

28,746,922 

17,385,755 

14,807,004 

19,175,867 

25,090,342 

• 28,488,597 

29,095,428 

35,401,972 

43,051,583 

63,317,014 

78,775,602 

92,003,944 

93,297,290 

96,123,586 

108,827,606 

120,213,611 

126,095,062 

137,170,919 

153,151,762 

165,165,876 

166,601,995 


$1,954,000 

3,749,000 

12,952,000 

12,450,000 

17,413,000 

17,579,000 

16,361,000 

15.226,000 

14.008,000 

14,212,000 

14,781.000 

17,924,000 

22,162,000 

27,133,000 

36,540,000 

37,168,000 

22,479,000 

19,144,000 

24,793,000 

32,440,000 

36,824,000 

37,618,000 

45,772.000 

55,663,000 

81,864,000 

101.851,000 

118,955,000 

120 626,800 

124,281,000 

140,706,400 

155.427,700 

163,032,000 

177,352,300 

198,014,400 

213,547,800 

215,404.600 


1521-1544 


1545-1560 


1561-1580 


1581-1600 

1601-1620 

1621-1640 


1641-1660 


1661-1680 


1681-1700 


1701-1720 

1721-1740 


1741-1760 


1761-1780 


1781-1800 


1801-1810 


1811-1820 


1821-1830 


1831-1840 ... 


1841-1&50 


1851-1855 


1856-1860 


1861-1865 


1866-1870 


1871-1875 


1876-1880 


1881-1885 


1886 


1887 


1888 


1889 


1890 .... 


1891 


1892 .. . 


1893 


1894 





POPULATION INCREASED 2 PER CENT. 
500 PER CENT. 



SILVER 



Prom the foregoing: table it will be seen that the production of silver 
In the whole world never but twice reached $30,000,000 a year before 1841; 
that by 1866-70 the annual production of silver had become almost double 
that amount; that by 1876-80 it had passed the $100,000,000 mark; and that 
now the annual production of silver Is almost seven times what it was 
half a century ago. During that time the population of the world has not 
quite doubled. That is, sir, while the world's population has increased at 
the rate of about 2 per cent a year, the annual production of silver dollars 
has increased by 500 per cent. In other words, to use a favorite method of 
theirs, the "per capita" of silver has increased enormously; so we would 
naturally expect an enormous fall in its price. 

From this (remembering also that the cost of production has greatly 
decreased) we see that the fall in the price of silver has not been as great as 
we would naturally expect. How is this accounted for? This wonderfully 
sustained price of silver can be accounted for in only one way, namely, by 
an enormous increase in the use of silver. This has taken place in two 
directions: 

1. In the arts. The use of silver in the arts has increased in the last 
quarter of a century several hundred per cent. (This increase in the W^ 



of silver in the arts has been so enormous as to have actually raised the 
price of silver during the last year.) 

2. As money. There has been added to the full tender silver money of 
the world in the last twenty-two years an amount equal to the accumula- 
tions of all the ages up to that time. 

In view of these facts, it is simply trifling with words to say that sil- 
ver has been "demonetized;" and to t^ay that "half our money has been 
struck down" is plainly to tell an unmitigated falsehood. 

The following chart, prepared by my distinguished friend from North Da- 
kota (Mr. JOHNSON), exhibits to the eye the increase in its production 
and the decrease in its price since 1S73: 



















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PRODUCTION AND COINAGE OF SILVER IN THIS COUNTRY. 

Our annual production of silver is now and has been for years more 
than a thousand times as great as it was before the war, and yet there are 
leaders among the silverites who find it necessary to malign human na- 
ture and attack the memory of good men in order to explain why an ounce 
^ silver is not worth as much now as .then. 



IQ 



Our total coinage of silver since 1873, up to and including 1894, has 
been $538,444,467. This is an average of almost $25,000,000 a year, or ten 
times the highest average annual coinage before 1873. And of this coinage 
the vast sum of $431,320,457 is in the form of dollars, every one of which 
is full legal tender. Such an enormous coinage of silver was never dreamed 
of in the world before. 

THE GREAT INCREASE IN GOLD PRODUCTION. 

But some one might properly ask in this connection, "Has not the out- 
put of gold increased also?" The answer is, "Yes, enormously." 

Up to 1848 the world's annual production of gold never but once 
reached $14,000,000, while in this last half century it never but once fell 
below $100,000,000, and in 1895 it was over $200,000,000. The world now 
produces more gold every month than it did in a year half a century ago. In 
other words, sir, the world's production of gold in these last 50 years exceeds 
by far its entire production for the preceding 400 years. This is the fact 
hinted at in my colleague's chart, but not clearly brought out. And the an- 
nual production of gold alone is now more than four times as great as was 
the production of both gold and silver up to 1840. This is the fact, sir, 
which has sounded the death-knell of the free coinage of silver. 

THEORETICAL VER5US PRACTICAL BIMETALLISM. 

The advocates of the unlimited coinage of silver say: "Open the mints 
to the free coinage of both metals. Then they will both be coined, and 
both will circulate as money." But though every country in Europe and 
America has tried this experiment, though some are still trying it, the ad- 
vocates of this method cannot point to a single instance in which their 
method has ever succeeded. As we have already seen, France had, with her 
mints open to both metals, first a circulation of silver up to about 1850, and 
then a reversal to gold only. 

Our own experience here in the United States has been the same. Our 
coinage ratio of 15 to 1, from 1792 to 1834, overvalued silver and undervalued 
gold, so during those years, at least the last 20 of them, our circulation con- 
sisted of silver and no gold. The change of ratio in 1834 and 1837 to 15.98 
to 1 (commonly spoken of as "16 to 1") overvalued gold and undervalued sil- 
ver, and silver gradually retired from circulation as money. No one would 
part with 371.25 grains of silver (the amount of pure silver in a dollar) 
for 100 cents as money when he could sell it for 103 cents as bullion. 

And this has been the experience of every nation that has ever tried 
the experiment. A double standard is, therefore, an alternating standard. 
It is not bimetallism, but one-at-a-time metallism. 

THE USE OF BOTH METALS. 

What the people want is the use of both metals, each in the way that 
will best serve their purposes. They v/ant the actual circulation of both, 
not simply the promise of it. You free silverites offer them a method that 
has always failed and in the nature of things always will. We offer a 
method that has never failed under normal conditions, and that is why it 
has been adopted by all the leading nations of the world. You offer a law 
permitting both to be coined, hoping that both will be. We offer a plan 
whereby the desired result is secured with certainty. Yours is the bimet- 
alism of the statute book. Ours is the bimetallism of the counting room. 
YQurs is theoretical bimetallism. Ours is practical bimetallism, 

n 



WHAT FREE COINAGE MEANS. 

What does "free coinage," as it is called, mean? It does not mean that 
the government would buy any of the silver; not an ounce. The govern- 
ment would simply receive the silver from its owner, stamp it and hand it 
back to him. Does that create any demand for the silver? 

Buckwheat flour is now used to a limited extent for food. The demand 
for buckwheat flour is entirely due to this fact. Would opening a new 
buckwheat flour mill create any demand for buckwheat? Certainly not, 
any more than the reaping and thrashing did. These are all simply steps 
in preparing the supply. The market would still have to be found In com- 
petition with other kinds of flour. 

OPEN MINT WOULD CREATE NO DEMAND. 

And similarly, the "open mint"^ would create no demand whatever for 
silver any more than the smelting or the mining does. These are all sim- 
ply steps in preparing the supply. The demand is in the need of money 
of various kinds with which to make exchanges. The owner of the coin 
would still have to go forth and find a market for this kind of money 
in competition with other forms of money. The minting would, there- 
fore, not create any demand for the silver, but would simply put it into 
shape to meet whatever real demand there might be for silver coin in 
the channels of trade in competition with other forms of money. 

And, sir, because of the bulkiness of silver in proportion to its value, 
the demand for silver coin in actual business is very limited. As a mat- 
ter of fact, there is more silver coin in this country to-day than can be 
used as coin. Experience has shown that the business of the country 
needs about $125,000,000 in silver coin of all kinds, including minor 
coins. But we already have a stock of silver coin amounting to over 
$500,000,000. So there is absolutely no trade demand for more silver 
coinage for some time to come. 

WAGES IN MEXICO. 

Every one will admit that, so far as legislation can affect the matter, 
that system is best under which those who earn their daily bread by 
their daily toil receive the best returns for their services. 

The following statement appears in bulletin No. 9, 1891, of the bureau 
of the American republics: 

"One of the greatest evils (referring to Mexico) at the present time is 
the existence of a scale of wages which defies all power of reduction, 
which robs the laborers of all sense of dignity or feeling of association 
with the rest of their fellow citizens, and having reduced them to a con- 
dition of abject abasement deteriorates to a like extent their productive 
power and the measure of their ability. They are content to regard them- 
selves as a plant or machinery which moves by extraneous aids only and 
has no power of volition, and no desire to exercise it if it had." 

We have before us, Mr. Chairman, a special message from the Presi- 
dent asking us to make an appropriation to pay certain railroads for car- 
rying certain people from the Mexican line to various parts of the United 
States. What is the story behind this? Simply this, sir: Some of our 
workingmen, having been told how fearfully they were being abused under 
our system, and being assured that things were "booming" in Mexico, be- 
came the victims of their misplaced confidence in free silver orators and 
went to Mexico. Then they learned the truth, finally coming home at 
public expense. How many more of our workingmen will allow thei©- 
e^lves to be made victims of similar tales? 



HOW ABOUT AMERtCAN WORKINGMENr^ 

And now let us see how the situation of workingmen in this country 
compared in 1890 with that during the so-called "bimetallic times." 

From the famous Senate report on wholesale prices, transportation and 
wages, before referred to, I take the facts for the following table of wages 
in leading occupations every tenth year for some time before the war, 
when we had our mint "open to the free coinage of both metals," in com- 
parison with wages in 1890, a sixth of a century after we finally adopted 
our present system of unlimited coinage of gold and limited coinage of 
silver: 



-Wages per dien.i — 



$1 75 


$1 75 


$3 50 


1 50 


1 50 


3 00 


83ya 


83V2 


1 75 


1 25 


1 25 


2 50 


1 25 


1 25 


2 50 


1 41 


1 52 


1 94 


2 25 


8 00 


4 25 


1 37 


1 44 


1 65 


1 04 


99 


1 25 


1 55 


1 70 


2 19 


1 06 


1 00 


1 55 



Occupation. 1840. 1850. 1860. 1890. 

Plasterers $1 50 

Blacksmiths 1 50 

Blacksmiths' helpers 83% 

Painters 1 25 

"Wheelwrights 1 25 

Carpenters 1 29 

Engineers 2 00 

Firemen 1 25 

Laborers §1 

Machinists 1 54 

Watchmen ; 1 1^ 

Average, according to importance, for 
all occupations, 1860 being reckon- 
ed as 100 87.7 92.7 100 168.6 

We have seen that the condition of American workingmen has lastly 
Improved since the days when we had free coinage of silver. It has been 
shown, also, that opening our mint to coinage of silver on private ac- 
count would at once send us to a silver basis. How would this affect 
wages and the men who earn them? Every man who earns his dally 
bread by his daily toil owes it to himself and those whom he holds dear 
to think this over carefully. 



PRICES CHANGE QUICKLY— WAGES CHANGE SLOWLY. 

Any man who will examine daily quotations of prices as reported in the 
newspapers will soon discover that they change from day to day and some- 
times change very greatly in the course of a month. But every man who 
earns wages is familiar with the fact that they change slowly, an increass 
of 10 per cent, in a year being quite a gain. Prices change quickly; wages 
change slowly. 

Now let us grant what the advocates of free silver claim — that going to 
the silver basis would "double the prices of commodities." Does any work- 
ingman believe that wages would be doubled too? Even if they should be, 
how much would the wage earner profit by the change? No intelligent 
workingman believes for a minute that his wages would be increased by 
more than a small per cent. — that is, while his wages might be nominally 
increased somewhat the prices of the things he has to buy would be increased 
very much more. So the real purchasing power of a day's work would be 
greatly diminished. All experience shows that any debasement in the 
money system of a country raises prices faster and farther than it does 
wages. This might influence some employers to consider the propriety of de- 
basing our currency, but it is precisely the reason why workingmen should 
oppose it. 

13 



So far as workingmen are concerned the whole silver question is to bd 
summed up in one query, Do you want your wages cut down? If so, vote for 
the free coinage of silver. 

WOULD NOT HELP THE FARMER. 

What inducements do the silver producers hold out to the farmers to get 
them to co-operate in this scheme? They promise the farmers higher 
prices for their products. The sensible question which every thoughtful far- 
mer will naturally ask is. Could they and would they keep their promise? 
Let us see what the chances are. 

They claim that "silver would increase in value and would carry witli it 
the prices of farm products." 

To say that there is any relation between the price of a metal dug out of 
our Western hills (depending for its value upon conditions peculiar to itself) 
and the price of any of the vegetable products of our fields (each of which 
depends for its value upon a set of conditions peculiar to itself) — to tell men 
that there is any relation between the prices of things so different in their 
nature and uses, is to insult the intelligence of those who are addressed. 

SILVER AND WHEAT. 

The total value of the silver product of the United States in 1802, even 
when reckoned at the price before 1873, was $82,101,000, and this was the 
greatest yield in the history of our silver production (Mint Report, page 
242). 

According to the Statistical Abstract, page 267, the farm value of the cot- 
ton crop of this country in 1891 was $350,000,000; that of the wheat crop 
was, in round numbers, $400,0(X),(X)0, and that of the corn crop was over 
$800,000,000. The value of our corn crop alone was ten times the value of 
the silver crop of this country and four times the value of all the silver pro- 
duced in the whole world that year. Why, sir, the clucking hens of our 
farms produce more wealth every year than these silver miners, who so 
patronizingly tell the farmers what they will do for them. 

Farmer friends of mine in Minnesota have told me that before the war 
they have hauled wheat 50 miles to market with an ox team occupying days 
in each trip, and got 45 cents a bushel for it in wildcat money, which was 
in danger of being worthless when they got home. Yet in those days the 
mint was open to the "free and unlimited coinage of silver." 

THE SITUATION OF FARMERS IN 1873. 

So much has been said by free silver orators to mislead farmers into the 
idea that everything was prosperous with them before 1873 and nothing 
lias been since, that I submit now a paragraph that I have copied from the 
raport of the Iowa State Agricultural Society for 1873. It is from an ad- 
dress delivered by C. H. Rogers at the Harrison county fair, and gives a 
faithful picture Of the situation at that time in that mighty State: 

Proud of these aspects and of her progress in, practical agriculture, still 
the condition of the laboring man and farmer is far from what is desirable. 
They have worked, watched and waited for an adequate reward until weari- 
ness has well-nigh turned to helplessness. Farming has been a financial fail- 
ure for the past three years. Hard toil has opened up fine farms and 
brought to the bins the products of unexampled harvests, but the sales have 
hardly paid expenses and bought cheap clothing until the coming harvest. 
There is no surplus to improve buildings, purchase thoroughbred stock ail4- 
fumish the home with any of the luxuries of art and literature. ,. . -' 

14 



WOULD BE HARD ON DEBTOft^. 

Liet us suppose that the advocates of free silver sweep everything before 
them, capturing the Presidency and the House and continuing to control 
the Senate. What would be the natural thing to expect? What would you 
do if some one owed you and you were not protected by a gold clause in the 
contract? You would demand what was coming to you. Every man hav- 
ing an obligation coming due would, in self-defense, demand all that 
might be coming to him while he could still get paid in money of full value. 
Debtors would be compelled to pay up at once or give new and better secu- 
rity, with a promise to pay in money of the present standard. On the ma- 
turing of their obligation they would certainly have to pay an enormous 
premium for the kind of money required. They would not escape making 
payment in money of the present standard and would have to take their 
chances of getting enough more for their products to enable them to make 
the payment without actual loss. They certainly would not gain anything 
and would take all the risk of losing— losing not only the premium which 
they would surely have to pay, but depending upon the forbearance of their 
creditors not to lose all they possess. 

And what is the probability of the creditor being able and willing to 
grant concessions? Depositors in banks would withdraw their deposits. 
This would compel the banks to call in their loans. The four months be- 
tween election and inauguration would be strewn with the wrecks Of busi- 
ness houses now giving employment to millions of people. 

FREE SILVER WOULD CONTRACT. 

The plan of the free silverites, as all experience shows, would subtract 
from our volume of money a very large and exceedingly valuable part 
of it. It would diminish our money by the amount of our gold and its rep- 
resentatives, at the very lowest estimate, $600,000,000. Its disappearance 
would be immediate. 

Moreover, sir, we would have poorer money. The silver money would 
be bulkier and less convenient than what we have now. And it would 
lack in stability. And while "money makes the mare go" we should 
not forget, sir, that it must be stable money. 

Creditors, as a rule, would therefore be unable, no matter how well 
disposed, to grant concessions to those who were owing them. We who 
are in debt, sir, are the ones most vitally interested in the defeat, the 
overwhelming defeat, of every proposal for the free coinage of silver. 

MARVELOUS PERFORMANCE OF A CIRCUS DOLLAR. 

When I was a small boy, I saw something that I shall never forget. 
It was at a circus. The clowns and some other employes arranged them- 
selves in a circle. Let us say that there were twenty of them in all. No. 
1 said to No. 2: "I owe you $2. I'll pay up as soon as I can." No. 2 made 
this statement to No. 3, No. 3 to No. 4, and so on around the circle. No. 
20 saying it to No. 1. No. 1 shoved his hands into his pockets and with a 
look of pleased surprise pulled out a dollar. Turning to No. 2, he said: 
"I didn't know that I had that dollar. Here's so much on account." No. 2 
took the dollar, and with similar language passed it on to No. 3, and so 
it went around the ring. No. 20 passed it to No. 1, who received it with a 
smile and started to put it into his pocket, but instead he turned to No. 2, 
and said: "I didn't expect to be able to pay you the balance so soon, but 
here it is." And so it went around the ring, finally coming back to No. 1, 
Who with a satisfied smile put it Into his pocket. 

16 



To the little boy who looked as 1 did thirty odd year^ ago, this wa§ 
simply the funny work of clowns, to be laughed at and forgotten. It was not 
forgotten, however, and to the man older grown and charged with the 
serious consideration of the affairs of a great nation, it illustrates the pro- 
foundest truth in finance. What is that truth? It is this: Under proper con- 
ditions the working power of a dollar is beyond all human computation. 

BASKETS FOR WHEAT, DOLLARS FOR BUSINESS. 

I was very much surprised to hear this afternoon a man so promi- 
nent as my friend from Tennessee (Mr. McMillin) speak as if money paid 
for taxes was lost to circulation. I have often heard men speak as if they 
thought that there must be as many dollars in existence as there are dol- 
lars' worth of business to be transacted. "What would a farmer say to 
an agent for bushel baskets who should attempt to convince him that he 
needed as many baskets as he expected to raise bushels of crop? The 
farmer would feel that his intelligence had been insulted, and justly so. He 
knows that he can use the same basket over and over again, and the 
quantity measured in a given time will depend on the speed with which 
the one handling it works. And then, if properly used, it is ready to 
do as much more. 

So with the yardstick, the pound weight and the dollar. Each can do 
an almost infinite amount of work if properly used. What are the con- 
ditions of highest efficiency in money — under what conditions can a given 
amount of money do the most work? Let us examine our illustration. 

The dollar in the circus ring did the work of forty dollars in five min- 
utes and was just as capable of accomplishing as much more in the suc- 
ceeding five minutes. Why was this? Simply because it moved promptly. 

QUALITY MORE IMPORTANT THAN QUANTITY. 

With good money and mutual trust a dollar did the work of forty, 
while with questionable money and distrust twenty dollars could accom- 
plish nothing. In other words, the quality of money is immensely more 
important than its quantity. 

And, sir, a set of men who make it part of their plan to malign 
human nature and then offer us a debased currency would not only deprive 
us of part of the money that we now have, but they would paralyze the 
working power of what remained. They are not only morally wrong, but 
financially unwise. They and their policy are alike condemned. They offer 
poor money and distrust. We offer abundant money of the best quality 
and well founded confidence. Is there any doubt as to which the American 
people will approve? 

To employ a Isure of speech, we contend that our body politic needs 
in its circulation Vuth kinds of corpuscles, and that it needs them both 
all of the time. Tae best that is promised by the gentlemen on the other 
side is that their plan will furnish them alternately; one at a time, first 
one and then the other — that is, sir, they offer us a sort of chills-and- 
fever system, which would produce distress in life, and would result in 
early death to business enterprise. 

Our plan secures to our circulation all the elements needed for the 
health of the body, including both kinds of corpuscles, all of the time and 
in the proportions demanded by the most vigorous life. And behind this 
good financial blood, to prevent its stagnation, to propel it in life giving 
circulation, even to the extremities of the body, we place the great heart, 
confidence — confidence in our financial system and in each other, confidence in 
our system based on approved experience, confidence in each other based 
on the knowledge, that after all, men would rather do right than wrong. 

16 



A POPULIST HUMBUa EXPLODED 



(( 



REFUTATION 

OF THE ALLEGED 

Seven Financial Conspiracies/' 



INCURRING AND PAYING THE WAR DEBT. 
CREATING AND REDEEMING THE GREENBACK, 



Where We Stood and Where We Stand. 

FACT AGAINST FICTION. 



FROM THE REMARKS OF 

Hon. J. W. Babcock, of Wisconsin, 

IN THE 

House of Representatives, 

WASHINGTON, D. C. 



A POPULIST HUMBUG EXPOSED. 



THE ALLEGED 

"S^v^n Fin^rioial Conspiraoi33" 

REFUTED. 



CREATING AND REDEEMING THE GREENBACK. 



FACT VERSUS FICTION. 

THE ALLEGED 

Sovon Pin3noi3l Conspiraoios" 

REVIEWED. 



ANANIAS AND SAPPHIKA. 

As Nero is the synonym for cruelty, and Benedict Arnold for treason, so are Dives 
and Lazarus for the rich and poor, and Ananias and Sapphira for those who disregard 
the truth. Hence our title and mottoes, fitly characterizing a pamphlet called " The 
Seven Financial Conspiracies which have enslaved the American People." To save 
words, Ananias will be named and Sapphira understood. 

If the system of Government as instituted by our fathers afforded little if any op- 
portunity for robbery and oppression, neither does it now present such opportunity, 
for the Constitution is the same, except that as slavery, ''the sum of all villainies," 
has been abolished, that method of robbing and oppressing the laborer no longer exists. 

As Dives and Lazarus lived nineteen hundred years ago, and have lived in all ages 
and in all countries of which there are any historical records, to attribute the riches 
and poverty which may now exist to seven '■'■conspiracies " of the past thirty-three years 
exhibits a disregard for truth worthy of Ananias. To paint the American laborer of 
thirty years ago as a prospective lord, peaceful, sober and respected, with home and 
plenty, while now he breaks beneath the weight of oppression, seeks relief in a sui- 
cide's grave, or attempts to drown his grief in the intoxicating cup, is a bit of romance 
Munchausen might envy. But history is more reliable than romance. 

THE STARVING POOR OF THE FIFTIES. 

' * In the winter of 1853-54, processions of the unemployed paraded New York. Soup 
houses for the gratuitous feeding of the starving poor were opened in all parts of the 
city, as well as in the other cities of the Atlantic coast ; manufactures and agriculture 
were in a state of prolonged prostration." — Denslow. 

"When Congress met in December last the business of the country had just been 
crushed by one of those periodical revulsions which are the inevitable consequence of 
our unsound and extravagant systen of bank credits and inflated currency. With all 
the elements of National wealth in abundance, our manufactures were suspended, our 
useful public and private enterprises were arrested, and thousand of laborers were de- 
prived of employment and reduced to want." — Buchanan's Message, December 6, 
1858.' 

3 



This was before the days of the '* seven conspiracies," when there were no National 
banks, and Shylock had not enslaved the people. Stern realities dissolve fairy visions. 
In truth, the " American laborer " of to-day is better paid than the laborer of any other 
country, and his wages wnll procure for him more of the food, clothing, and comforts 
of life than in any former age. The savmgs bank is the barometer of the poor man's 
condition, and that records as follows : 

SEVENFOLD FOR DEPOSITORS— TENFOLD FOR MONEY. 

In i860 there were 278 savings banks, with 693,870 depositors of $149,277,504, an 
average of I215.13. In 1870 there were 5 17 banks, 1,630,846 depositors of $549,874,358, 
an average of $337.17. In 1880 there were 629 banks, with 2,335,582 depositors of $819,- 
106,973, an average of $350.71. In 1890 there were 921 banks, with 4,258,893 depositors 
of $1,524,844,506, an average of $358.03. In i860 the average of deposits to the whole 
population of the country was $4.75 per head ; in 1870, $14.26; in 1880, $16.33 ; and in 
1890, $24.35. In these thirty years '^^ poptilation was doubled, the number of depositors 
has increased sevenfold, and the amount of money has increased tenfold. Some differ- 
ence, is there not, between fact and fiction ? 

As to the increasing army of " tramps," "drunkards," and *' criminals," this great 
army is not made up of American laborers," The institution is an importation, and 
when we remember the hordes of criminals, paupers, insane and imbeciles we have 
allowed Europe to dump upon our shores from her prisons and poorhouses, there is no 
mystery as to where the recruits came from. Even Ananias ought to have remembered 
this. As to the slanderous characterization of American laborers involved in the picture, 
it is worthy of Ananias himself. 

EVERY SCHOOL-BOY KNOWS WHAT CAUSED THE WAR. 

The proposition that the war of the rebellion was brought about by the Rothschilds, 
Shylocks, and money kings of Wall street and Europe, to afford an opportunity for 
robbing, oppressing, and enslaving the American people, discounts Ananias multiplied 
by Munchausen. Every well-informed school-boy is supposed to know that the contro- 
versy between " State Rights " and " National Sovereignty " began with the formation 
of the Government, came near precipitating a civil w^ar when South Carolina undertook 
to "nullify " the tariff of 1828, crystallized about the slavery question, and terminated 
in "secession " on the election of Lincoln in i860. 

Did the ^^ Shylocks ^^ originate this cojitroversy more than a hundred years ago, 
guide our political disputes and shape our public affairs so as to result in civil war, that 
negro slavery might be abolished and the white people robbed and enslaved? If so, 
how can it be said that the system of government instituted by our fathers afforded little 
opportunity for robbery and oppression when this was its very essence and aim ? The 
Democratic Governors, Legislatures, members of Congress, and Statesmen generally, 
who maintained the doctrine of State Sovereignty, who organized and led the secession 
movement, and who exposed their lives to the dangers of war, must feel marvelously 
complimented and pleased to know that they were but the blind tools of the money 
kings who, through their passions, made this opportunity to rob and enslave the people. 
Verily, when Ananias and Sapphira go to their own place, the personage mentioned 
by St. John, 8 : 44, will be ready to resign in their favor. 

ALL EUROPE THOUGHT THE GREAT REPUBLIC DOOMED. 

On the 4th of March, 1861, the public debt was $68,482,686.19, as stated by Secretary 
Chase. The Treasury was empty, and the public credit seriously impaired. There was 
hardly the pretense of an army, the little navy was scattered in distant seas, and the 
small amount of arms and munitions of war mostly within the reach of the rebels. 
Our ships had been seized, as had our mints, arsenals and other property. Seven States 
had seceded and formed a Confederate Government. Our flag had been fired on in 
Charleston Harbor, and our troops captured in Texas. A state of war existed when 
Mr. Lincoln was inaugurated, and all Europe thought the great Republic was doomed. 

The amount of specie in the country was estimated at $250,000,000, and the amount 



of State bank notes at $202,000,000. There were no greenback tiotes of the Covern- 
ment and no national bank notes of any kind. For years the balance of trade had 
been largely against us. The tariffs of 1846 and 1857 failed to produce sufficient 
revenue to meet current expenses. The credit of the Government was so badly im- 
paired that six per cent, bonds had to be sold at twelve per cent, discount. These were 
the conditions under which Mr. Lincoln's Administration entered on the Herculean 
work of subduing the rebellion and restoring the Union. With a hostile party at home 
declaring that the "States" could not be "coerced," and a foreign sentiment in 
sympathy with the rebellion, was it any wonder that capitalists at home and abroad 
were afraid to lend their money, and when they did so required payment to be "nom- 
inated in the bond? " Not " Shylock," but common sense dictated this. 

WHILE THE WORLD HAS ITS HAT OFF OUK ANANIASES 

PROPHESY EVIL. 

Money was an essential to the prosecution of the war, as were men and munitions. 
The first loan called for by the Government was responded to with patriotic prompt- 
ness by the banks, but their want of coherence and cooperation, from the varied State 
laws, rendered it impossible to depend on them. Their resources were limited, their 
means immediately exhausted, and in December, 1861, they were compelled to suspend 
specie payment. Not to conspiracies of moneyed men, but to the stern necessities of 
war, the instinct of self-preservation, and the best brains and statesmanship of the 
nation, do we owe the series of financial measures which carried us through the terrible 
ordeal, and brought us back again to a specie basis and a restored public credit. It 
would not do to say that no financial mistakes were made, any more than it would to 
say there were no military mistakes. But in spite of all blunders, military or monetary, 
the country came grandly through it all ; and the civilized world has stood with its hat 
off in amazement and admiration at our achievements. It is the Ananiases of our own 
people who carp and find fault, who prophesy evil, and strive to make their prophesies 
come true. And it is out of the unprecedented difficulties through which their country 
has passed, that they weave the tissues of falsehood found in this pamphlet to which 
our attention is now given. 

THE FIRST CONSPIRACY— COLLECTING AND PAYING SPECIE. 

The first conspiracy of the Shylocks and money kings to rob and enslave the Ameri- 
can people is discovered by Ananias in the act of February 25, 1862, in which is au- 
thorized the issue of 1150,000,000 of Treasury notes. These were to be without interest, 
no time was fixed for their redemption, and they were to be receivable for all dues to 
the United States except customs, and payable on all debts of the Government except 
interest on the bonds ; and they were made a legal tender for all private debts. These 
were the first " Greenbacks," and the conspiracy is found in the " exception " of cus- 
toms and interest from the obligations they could be used to pay. Of course, Ananias 
pays no attention to time, the order of events, or the conditions surrounding their issue. 
We are told that the " demand notes " were always at par with gold, because they did 
not contain this exception ; and that the greenbacks would also have continued at par 
if they had not been discredited by the exception named. And, therefore, the con- 
spirators are charged with wHfully depreciating the greenbacks in order to "rob the 
people." 

1. Ananias does not advert to the facts that these demand notes were issued before 
the suspension of specie payments ; that they were payable in coin on demand ; that 
they were not a legal tender, and that they were practically q\\ presented and paid off 
within two years, the amount outstanding September 30, 1863, being but ^52,022,173. 
Quite different from these were the greenbacks, whose number finally reached 1^447,300,- 
203, and whose depreciation folloived the fortujies of the war, the bitterness 0/ partisan 
opposition, the probabilities of success in preserving the national life^ and the payment 
of the im-inense war debt. 

2. But why was the " exception " introduced into the act ? For many reasons, (i) 
Because there were then $300,000,000 of interest-bearing bonds which had been issued 



6 

upon a coin basis. (2) Because specie payments had just been suspended, more money- 
had to be borrowed, and it was necessary to assure the creditor that he should be paid 
in money, and not forever be put off with mere "promises " of money. (3) Because it 
was necessary to compel the use of coin for tariff duties in order to keep it from all leav- 
ing the country. (4) Because luithout this pledge of the payment of interest, and finally 
of the principal, in coin, oicr paper of all kinds, notes and bonds, ivould have gone the 
way of the French assignats and our Revolutionary script, and become utterly worth- 
less. (5) And because without this we would have failed to borrow money, the war 
could not have been prosecuted, and the Nation would have perished. 

WAS ABRAHAM LINCOLN AN AKCH-CONSPIRATOK ? 

3. There is therefore much more in these acts than Ananias seems to have dreamed 
of. That of July 17, 1861, provides for a loan of $250,000,000 of bonds, at not more 
than 7 per cent, redeemable any time after twenty years ; or Treasury notes, at 7.30 
per cent., payable in three 3^ears, exchangeable for coin, and of course payable in coin, 
as there was then no other money to pay them in. There were $140,094,750 of these 
notes issued, and they were not made a legal tender. There were also $189,321,350 of 
the bonds, at 6 instead of 7 per cent., payable in twenty years, the " supplemental " act 
of Augusts, 1861, having increased the amount. 

The greenback act authorizes, as stated, $150,000,000 of these notes, of which 
$50,000,000 were to be in lieu of the demand notes ; these greenbacks were exchange- 
able at the pleasure of the holder for 5-20 year certificates of deposit, to bear 6 per cent, 
inl erest. And the act authorized $500,000,000 of 5-20 year 6 per cent, bouds to be disposed 
of for com or Treasury notes. That is, the greenbacks might be redeemed in 5-20 bonds, 
not the bonds redeemed in greenbacks. And this act provides for the collection of the 
tariff duties in coin, and that " the coin so paid shall be set apart as a special fund and 
shall be applied as follows : First, to the payment in coin of the interest on the bonds 
and notes of the United States ; second, to the purchase or payment of i per cent, of 
the entire debt of the United States, to be made within eachfiscal vear after the ist day 
of July, 1862." 

This act is the foundation of all our war financial legislation, this pledge of the pay- 
ment of principal as well as interest in coin has never been zuithdrawn, and no law was 
ever more misrepresented and lied about. It was standing steadfast by this pledge 
which enabled us to meet $5,000,000,000 of war expenditure, to shoulder a debt of 
$2,800,000,000 after its close, to successfully return to specie payments in less than 
thirty years, to reduce the debt by $2,000,000,000, and to accumulate a stock of gold 
and silver of $1,250,000,000, as we have done. 

4. B^ it remembered that if this act was a conspiracy to rob the people, Secretary 
Chase, who recommended it, and Abraham Lincoln, who approved and signed it, were 
the arch-conspirators , who deserve the execration of the American people. But if it 
was a wise and necessary act, which laid the financial foundation for the success of the 
National cause, then they deserve our admiration and reverence. 

THE SECOND CONSPIRACY— THE NATIONAL BANK SYSTE3I. 

The second conspiracy'- discovered by Ananias for robbing and enslaving the people 
v/as through the establishment of the National bank system. 

I. It must be remembered that banking was not invented by these conspirators, 
whoever they may be, for banks had been in existence for centuries, aud in the United 
States from before the Revolutionary War. Neither was it that the sj^stem of banking 
was National; for other nations had National banks also, and Washington had signed 
one U^iited States bank act in ijgi, and Madison another in 1816. Nor was it a novelty 
that these banks were allowed to circulate their notes as money ; for we had bank-note 
money in great abundance and in great variety before the war. In fact, Joseph's coat 
of many colors was not so variegated. With zuild-cal, red-dog, blue-pup, and other 
beastly brands, we also had secure and well-managed institutions. The conspiracy, 
then, was not to establish banks or to issue bank notes, but to establish the particular 
kind of banks which were authorized by Congress during the Civil War. 



APPROVED BY PRESIDENT LINCOLN. 

2. The present National bank act was approved by President Lincoln, and went 
into effect June 3, 1864. It was entitled "An Act to provide a National currency, 
secured by a pledge of United States bonds, and to provide for the circulation and 
redemption thereof." One cannot but be curious to know in which one of these 
objects the virus of these banks is found. Is it in a '■'■ National currency,'''' or in the 
"■security of bonds,'''' or iii their '■'circulation " in business, or in their *' redemptio?i," 
or was it in something not expressed in the title? When this act was passed there 
was no coin in circulation except about $25,000,000 in California. On the ist of July, 
1S64, there were outstanding: State-bank notes, $179,157,717; greenbacks, $447,300,203; 
fractional currency, $22,894,877 : a total of $618,332,797. 

NO MORE GREENBACKS COULD BE FLOATED. 

At that time the currency was worth $100 of gold to $258 of greenbacks. Our 
credit had absolutely reached its lowest ebb ; no more greenbacks could possibly be 
floated, and Congress had given a pledge that no more ehould be issued. Grant was 
advancing on Richmond and Sherman on Atlanta, but slowly, uncertainly, and with 
desperate losses ; Early came within the District of Columbia and threatened the Cap- 
ital ; Knights of the Golden Circle zuere active in the Western States ; conspiracies were 
formed for the release of Confederate prisoners of war ; the Democratic party was 
declaring the war a failure, and demanding a cessation of hostilities. Dark, indeed, 
in that summer of 1864, seemed the fortunes of the Republic. Congress had to resort 
to every available means to supply a currency, to sell bonds, and to maintain the army. 
In June the bank law was passed, in vSeptember Atlanta fell, in November Lincoln was 
reelected, and the summit of danger was reached and passed. What knows or cares 
Ananias for all this ? 

3. But what good did the establishment of the National bank system do? (i) // 
created a demand for bonds, and brought money into the Treasury. (2) It established 
a reliable and responsible financial agency for the sale of bonds at home and abroad. 
(3) It increased the business currency, SidAing to the circulation $146,137,800 within a 
year. (4) It helped to accredit the greenbacks, in which its notes ivere redeemable. (5) 
It swept away the variegated system of State banks of issue, giving us instead a uniform 
system under the National authority. (6j It thus gave us the cheapest and safest system 
ofbankiiig in the world. And here we must give facts to vindicate these propositions. 

NO COUNTERFEITS. 

a. Furnishing the circulating notes, of like kind, by one central authority, and 
under a vigilant system of inspection and detection, the cost of manufacture and the 
danger of counterfeiting are reduced to their minimi. It is safe to say that the old 
system cost the people $100 to $1 of cost under the new in these particulars. Kvery 
man in business before the war will remember the literature of " counterfeit de- 
tectors," and the losses which he sustained. 

ALL NATIONAL BANK BILLS ARE GOOD. 

b. A uniform system of National bank notes, in which one bank is required to 
accept the notes of another, and all are secured by Government bonds, makes these 
notes secure in the hands of the people and of the same value everywhere. In thirty 
years the people have never lost a dollar from holding the notes of a broken bank, for 
the notes of broken banks are just as good as those of solvent banks. Think of the 
millions that were lost under the old system. In twelve years, from 185 1 to 1863, in 
one State, Illinois, there were eighty-nine failures and a loss to bill holders of $3,000,000, 
Other States had like experiences. In traveling all over the United States no care or 
expense is involved as to whether the notes of banks of one State will be good in 



another. Brokers' shops for the exchange of bills have disappeared, and millions are 
saved in this way alone. Under the old system in the purchase of goods and payment 
of bills and drafts there was a constant charge, especially against the South and West, 
for " exchange" on New York and other cities, amounting to from one to two per 
cent., when the money was perfectly good. This no longer exists, as the exchange 
between National banks is free. A return to the old system, with our present volume 
of domestic commerce, would cost hundreds of millions. 

SAFETY FOR DEPOSITORS. 

c. The constant examination of National banks by officers of the Government, the 
complete reports they must make of their affairs, and the margins for deposits and for 
redemption they must keep, do not give absolute security against dishonesty and mis- 
management. No vigilance can do that. But they give the largest possible security. 
All the losses the people have sustained from these causes in thirty years are trifling, 
compared with similar losses under other systems. The present Comptroller of the 
Currency says that of 4,930 banks organized from the beginning, 246 have failed, about 
5 per cent, of the number. Of these 60 paid in full the principal of their debts, 59 
paid in part, and 127 are not yet completely settled. Of 181,963,207 of approved claims 
against them, 150,943,147 have been paid, and of the $31,020,060 remaining, the larger 
portion will be paid on final settlement. 

If half the amount is finally lost, it will make the average loss per year abovit half 
a million dollars for the whole system. There are no such accurate reports concerning 
State, savings and private banks, but some facts are furnished by official reports. 
Thus, in 1878, the Comptroller collected data showing that in three years preceding 
the local bank failures in the five States of Kentucky, Indiana, Ohio, Illinois and Mis- 
souri, involved a loss of $10,587,747, while in the same States in sixteen years the loss 
from National banks was $2,146,324 ; or the losses in one year of State institutions ex- 
ceeding the losses of sixteen years of National institutions. In the Comptroller's report 
for 1879 he gives a list of the failure of five National banks in the cities of New York 
and Brooklyn in sixteen years, with final losses to the amount of $91,421 ; while in 
eight years there were failures of twenty-two savings banks alone, with losses to the 
amount of $4,475,061. The failure of one single British bank— 'Cii^ Qity oi Glasgow 
Bank — involved a heavier loss than all the failures of all the National batiks in the 
United States in thirty years. With a capital of $8,000,000, this bank incurred liabilities 
of over $50,000,000, loaned to four of the directors more than $28,000,000, and caused 
financial losses of over $21,000,000. Such results are impossible under our system. 

BAl^KS INCREASE CIRCUL.ATION. 

4. But Ananias declares there is no necessity for banks ; that all money ought to 
be kept in circulation ; that they^grow enormously rich by robbing the people ; that 
they get double interest on their money, and much more of the same sort. Well, let 
us see : 

The last report of the Comptroller of the Currency states that 97 j per cent, of the 
bfisiness of the country is done in credit paper, checks, drafts, bills, etc., and 8. j per cent, 
on cash payments, but this is almost entirely Government and bank UQtes. If there 
were no banks, clearing-houses, and similar moneyed institutions, nine-tenths of the 
volume of commercial business would be at once stricken down. 

What is ' ' circulation ?" It is going round and round ; as the blood flows out of the 
heart through the arteries to every part of the body and back to the heart through the 
veins, to receive a fresh impulse. The moneyed institutions of a civilized country are 
the heart of its commerce and the necessary means of its circulation. They are the 
places of safe deposit, also, where thieves seldom break through and steal, as they 
would often do if money were kept in dwelling-houses. The New York Ciearing- 
House for the year ending October i, 1893, effected '* exchanges" — "circulation " — 
to the amount of $34,421,380,870 by the daily use of $5,616,580 — $6, 000 of " circulation " 
to $1 of money. 



9 

BANK PROFITS-CIRCULATION, 1 PER CENT.-OK ALL 
BUSINESS, 5 PER CENT, 

The same report shows the possible profits of a National bank to be as follows : 
To buy |ioo,ooo of 4 per cent, bonds as a basis for business the banker must pay $111,- 
171.20 ; on deposit of these bonds he can get $90,000 in blanks, which he can convert 
into bank bills by proper signatures ; the interest on his bonds at 4 per cent, will be 
$4,000, and the interest on his bank notes, if all loaned at 6 per cent., will be $5,400 ; 
total, $9,400. From this income must be deducted the i per cent, tax on circulation 
by the United States, $900 ; cost of sinking fund for redemption, $533.25 ; Comptroller's 
charges for various expenses, $62.50 ; making annual cost $1,495.75, and leaving net 
income, $7,904.25. In this nothing is charged against the notes on account of rent, 
clerk hire, salaries, etc. 

Now, suppose instead of placing his money in bonds the capitalist loans his money 
direct, his $111,171.20, at 6 per cent., would bring him $6,670.27. Deduct this from the 
bank receipts, and there remains as \h.^ profit on circulating notes ^ $1,2^3. g8, or abotU 
1% per cent. But other expenses reduce this to nothing, and hence the National banks 
have reduced their circulation of notes to nearly one-half of what it was twenty years 
ago. The same report, Table 62, gives the actual dividends of all the National banks 
for one year, from September i, 1892, to September i, 1893, from which it appears 
that the profits of the e7itire system, counting on all classes of business, was, for the 
whole United States, 5.33 Per ce?it. on capital and surplus, or less than the legal rate of 
6 per cent., and less than they would have realized if they had done business as indi- 
viduals. 

BONDS TO SECURE CIRCULATION. 

As to Ananias' fiction concerning Mr. Jones selling his 1,000 bushels of wheat for 
$1,000, and having returned to him ^900 of the amount, it is not enough alike to be 
even a decent caricature. When the banker buys $100,000 worth of bonds, the United 
States does not return to him go per cent, of the money he pays for them, not a single 
dollar of it. When he deposits these bonds in the United States Treasury the Govern- 
ment does not return him nine-tenths of the bonds, nor even a single one of them. 
Neither does it return to him $go,ooo in money, nor even a sifigle dollar. What it does 
do is to take $100,000 bonds as security and give him $90,000 in blank sheets, which he 
may convert into notes or not, at his pleasure. In the state the Government turns 
them over they are of no value in the hands of a third party. Oiily when the banker 
signs them and makes them his ow7i promises to pay do they acquire value. They are 
not then Government notes, and the Government does not owe a dollar of them. 
The bank owes them, and the bank must pay them. All that the Government does is to 
hold the bonds as security for the people, and to pay these bills out of the proceeds of 
the bank's bonds if the bank fails to pay them. 

SHALL WE HAVE STATE OR NATIONAL BANKS? 

Since, then', banks are a necessity to every commercial nation and every trading 
community, as a safe place for the deposit of money and for loans and exchanges ; as 
we can do ten times as much business with them as we can without ; as building cities, 
opening farms, establishing factories, moving crops, transporting merchandise, and all 
the multitudinous and magnificent enterprises of modern life are greatl}^ facilitated by 
them, the only question is, shall we have State or National Banks ? That the Confed- 
erate Democrats, who assert the sovereignty of the States and assail everything National, 
should demand the repeal of the 10 per cent, tax on State bank issues, and a return to 
the old State bank paper, is perhaps to be expected ; but why any other intelligent 
person should do so is a myster3^ Of course, if the Chicago plalfor)n prevails, National 
banks must go, and the State bank system will be reestablished. There was never a 
National currency under Democratic rule. If it was the Shylocks and money kings 



10 

who delivered us from the old wild-cat system by establishing the National system in 
its place, the people should take off their hats and salute them as patriots. But if it 
was Lincoln, Chase, and their associates, they are the patriots to whom the people 
should bow down. 

Of course, Ananias and his tribe do not comprehend the fact that if any one is 
robbed by a National bank it is with his own free will. The law does not compel the 
farmer to sell his wheat, or the merchant his calico, for bank notes. Neither is he 
compelled to deposit his money with nor to borrow from them. The man who bor- 
rows money, or buys goods on credit, or places a mortgage on his farm, must expect 
to pay, and has no right to complain because payment is enforced. He can not always 
expect to live on other people's money. When these people want to borrow 
from the bank they are very anxious for an "accommodation ; " but when they are 
called on to pay, then it is " oppression and robbery." But so it has been in all ages. 
Times are " easy " when we are going into debt, but times are "hard " when we have 
to pay these debts. 

THE THIRD CONSPIRACY-CONTRACTION OF THE CURRENCY. 

The third conspiracy charged is contracting the currency by the destruction of the 
greenbacks. This charge is formulated: "On the 12th day of April, 1866, Congress 
passed a law authorizing the Secretary of the Treasury to sell 5-20 bonds, and with the 
proceeds to retire United States currency, including greenbacks." We are told that 
"the country was in possession of $1,996,687,770 of currency ; " that during the year 
1868, $473,000,000 of money was destro3^ed ; that this process went on up to 1876, when 
the volume said to be destroyed foots up a total of $1,179,901,418. This left, as per the 
figures given, $816,786,252. Where Ananias obtained these figures we are not told, nor 
what kinds of money went to make up the nearly $2,000,000,000 stated. But the ofiicial 
report of the Comptroller of the Currency, dated December 3, 1877, says : "The pub- 
lic debt reached its maximum on August 31, 1865," as follows : 

1. Funded debt $[,109,568,192 

2. Matured debt 1,503,020 

3. Temporary loans : 107,148,713 

4. Certificates of debt , 85,093,000 

5. Five per cent, notes (legal tender) 33>954,230 

6. Compound-interest notes (legal tender) 217,024,160 

7. United States notes (greenbacks) 433,160,569 

8. Seven-thirty notes 830,000,000 

9. Fractional currency 26,344,742 

10. Suspended requisitions 2,111,000 

Total -. $2,845,907,626 

" Of these, $684,1.^8,959 were a legal tender in the payment of debts." With the 
fractional currency, this made the " United States currency, including greenbacks," 
amount to $710,483,701. Ananias states the currency at nearly three times the true 
amount, and the '-'destruction " at ^o per cent, more than the amount which ever existed. 
The same report shows that after the alleged destruction of more than ever ex- 
isted, on January i, 1877, there were still remaining : 

1 . Legal-tender notes $366,055 ,084 

2. Old demand notes 65,462 

3. Fractional currency 26,348,206 

Total $392,468,752 

EXPANSION INSTEAD OF CONTRACTION. 

The contraction of Government paper was $318,014,949, of which over $250,000,000 
was interest-bearing notes. But in the meantime there had been added to the currency 
bank notes to the amount of $145,381,654, making the real contraction $172,633,298. 



11 

But some other things also took place. On January i, 1866, the greenback was 
worth in gold 69.20 per cent.; on January i, 1877, it was worth 93.46 per cent. So 
that there was added to the purchasing power of the greenbacks, and equally of all the 
other " currency " which kept pace with them, 24X per cent., equal to an increased 
value of $173,160,506, instead of a loss of $172,633,298. That was not all. The public 
debt was reduced from July i, 1866, to July i, 1877, $622,984,782, causing also a re- 
duction of our annual interest charge from $146,068,196 to $93,160,644. 

This yearly saving of $52,907,552 was a direct result of the contraction complained 
of. But still the statement is not complete, for the last annual report of Secretary 
Carlisle gives the total currency, including specie, on July i, 1866, as $673,488,244, 
excluding, of course, all interest-bearing paper; and on July i, 1877, ^t $722,314,883, 
an actual increase of $48,826,639 of currency proper, instead of a contraction. In short, 
this is the state of facts shown by the officers of the Government : From July i, 1866, 
to Jul)^ I, 1877, there was a contraction of the public debt, a contraction of the annual 
interest charge, and an expansion of the currency proper by the amount stated, instead 
of the contraction alleged. 

But, says Ananias, during those years there were destroyed $850,000,000 of 7.30 
Treasury notes, and these notes, being a legal tender, formed a part of the currency. 
This is one of the standard lies of the tribe of Ananias. There are three reasons why 
these were not currency. (1) They bore the highest interest of any paper of the Gov- 
ernment, and hence would have been the last to be parted with by capitalists in the 
ordinary course of business. (2) They were in denominations of $50 to $5,000, none 
less than $50, and hence not at all adapted to serve as currency. (3) They were not a 
legal tender ; on the contrary, the act of March 3, 1865, in authorizing the issue of 
|6oo,ooo,ooo of them, expressly ''■Provided, That nothing herein contained shall be con- 
strued as authorizing the issue of legal-tender notes in any form. ' ' And there is another 
very potent reason why they were paid off and destroyed. They were all due and paya- 
ble within three years from date of issue. The last of them came due July 15, 1868, 
and they had to be paid or repudiated. And it was to pay these and other maturing 
obligations that so many 5-20 bonds were authorized and issued. Of course, to people 
who do not mean to pay their debts, this does not count for much. 

THE FOURTH CONSPIRACY— STRENGTHENING THE PUBLIC 

CREDIT. 

Following the deep gloom of the summer of 1864, when the public credit was so 
weak that $100 in gold was worth $2^8 in greenbacks, there came the political and mili- 
tary successes which closed out the Rebellion ; then the disbandment of the army, the 
reduction of expenditures and taxation, and payment of the public debt ; until fanicaiy 
/, i86g, the public credit had so improved that $100 in gold was worth only $ij^ i7i 
greenbacks. Further to strengthen the public credit, further to increase the value of 
the greenback, still further to reduce interest and taxes, came the act of March 3, 
1869, which Ananias denounced as the fourth conspiracy. He tells us that this " added 
$600,000,000 to the peoples's burdens. ' ' How ? 

By the improved value of the currency. To make a greenback that was worth 
only *' 38 or 40 " cents on the dollar to be worth "75 or 100 " cents, was to add to the 
people's burdens. Could stupidity go farther? But, we are told, the 5-20 bonds were 
payable in greenbacks ; this act changed the bargain and made them payable in gold, 
and this was what made the additional burden. It is alleged that they ought to have 
been paid in depreciated greenbacks instead of coin. 

IT WOULD MAKE NO DIFFERENCE. 

T. vSuppose all this to be true, which it was not, after January i, 1879, when 
specie payments were resumed, it would make no difference whether the}- were paid 
in gold or in greenbacks, since the latter were then worth as much as the former. 
Now, Secretary Carlisle's report shows that from May, 1869, to June, 1S79, the whole 



12 

amount of 5-20 bonds purchased for the sinking fund was 1185,172,450. That is, this 
was the amount actually paid off. Suppose we could have paid this in a 75-cent green- 
back instead of a loo-cent coin, what would we have gained? Just 146,291,612. This, 
then, was the additional burden instead of |6oo,ooo,ooo. 

2. But, as a matter of fact, these bonds were taken up by a process of "refund- 
ing." Bonds of a lower rate of interest were issued instead, and the actual money pay- 
ments were but the difference in market value. Very little coin ever passed, and it is 
not certain that there was a single gold piece in this particular case. 

3. But as to the main contention, it is not true that these bonds were payable in 
greenbacks. It was not so specified in the bonds, nor in the law which authorized 
them. Whils , as we have already seen, the original law under which the first 5-20 
were issued pledged the Government to collect its customs "in coin," and to "set 
apart this coin as a special fund " for the payment of both interest and principal. 

4. And neither does the act of March 18, i86g, i?i any wise " change the contract''' 
with the bondholder. Here is the law to speak for itself. It simply declares a purpose 
to pay in coin all obligations where the contract does not specify otherwise ; but 
where the note, the bond, or the law does specify that payment might be made in 
legal-tender notes, such obligations were still to be so payable. 

5. We have already seen that the increased value added to the people's money from 
the date of the act to strengthen the public credit to the resumption of specie pay- 
ment was more than twice as much as the value added to the bonds purchased, so 
that on the lowest plane of profit and loss, and without regard to the greater question 
of honesty and good faith, we gained twice as much as we lost. And to this we must 
add all the subsequent gains from debts paid and interest reduced. As to the relations 
between Baron Rothschild and August Belmont, Chairman of the Democratic National 
Committee, for the defeat of Seymour, Ananias may be in the secret of such treason, 
but most people will think the story is one of Ananias' own and greatest. Now, is 
there any necessity for defending the reputation of Grant, Morton and Sherman against 
the charge of being " fratricidal conspirators? " The memories of these great leaders 
will be held in reverence, whilst that of Ananias continues as it has ever been. 

THE FIFTH CONSPIRACY— REFUNDING THE PUBL.IC DEBT. 

To any man of honest instincts \h^ payment of his debts is a source of satisfaction, 
and to any man of ordinary sense the opportunity to take up his interest-bearing notes, 
and by the payment of a portion of his obligations to exte^id payment of the remainder 
at reduced rates of interest is a matter for congratulation. That is just what the Gov- 
ernment has been doing ever since the war. But instead of seeing in this reduction of 
the burden of debt, interest and taxation a matter of rejoicing, Ananias and his tribe 
denounce it as a?i " enormous crime y^' perpetrated by conspirators, to reduce the people 
to abject and hopeless servitude. 

1. On August 31, 1865, our interest-bearing debt amounted to 12,381,530,295 ; on 
July I, 1893, it was only $585,037,100. To thus deprive the '■'• Shylocks and money 
kings''^ of a profitable investment in bonds to the amount of $1 ,'j()6,4g3jgs, appears to 
Ananias an infamous proceeding. At the first date our annual interest charge was 
1150,977,698 ; at the last named it was $22,894,194. To cut off the incomes of the '■'■ bloated 
bondholders " $128,083,504 a year fills the soiils of the tribe of Ananias with the most 
profound horror! No wonder the Ananiases curse the name of Ulysses S. Grant, 
and seek to pillory John Sherman for bringing about such results. " Bartering away a 
blood-bought inheritance," "selling the birthrights of the children" of Shylock, is 
indeed a fearful crime. However, the country and the Republican party will no doubt 
both survive this denunciation. 

2. Now, what does all this " refunding the public debt " mean ? Nothing but this : 
During the war the Government had to borrow immense sums of money, nearly $3,- 
000,000,000, in addition to the amounts it was collecting by taxation, in order to meet its 
expenditures. In order to borrow this money it had to give its creditors some evidence 
of its indebtedness. This evidence took all sorts of forms as seemed most available, 
bonds, notes, certificates, etc. Some of it was without interest, but the vast majority 



13 

at rates of 3><, 4, 5, 6, and 7.30, mostly at the last two. These obligations were' payable 
on demand on sixty da^'s' notice indefinitely, and in one, two, three, five, ten, seven- 
teen, twent}^ forty years, etc. Now, when the w^ar was over, the Government set itself 
in earnest to the payment of its obligations, and as they came due much faster than 
they could be paid, they were taken up and new obligations given in their place. The 
whole refunding scheme was comprehended in this : ( i) To pay the debt as fast as pos- 
sible ; (2) to give new obligations in place of those coming due that could not be paid ; 
(3) to take up the obligation bearing a higher rate of interest, and issue instead others 
at lower rates. 

REDUCTION OF PRINCIPAL AND OF INTEREST. 

In this way the principal of the public debt, less cash in the Treasury, has been 
reduced from $2,756,431,571 in 1865 to 1838,969,475 in 1893; and the interest-bearing 
debt and yearly charge reduced as above stated, and the public credit so improved that 
it can now sell bonds at par with only 2 per cent, of interest. The 150,000,000 sold by 
Secretary Carlisle to protect his gold reserve was sold on this basis. No nation was 
ever able to do better than this. There are three things which Ananias and his tribe 
seem to be incapable of comprehending : First, that every bond, certificate and note, 
whether bearing interest or not, when issued by the Government, is aft evidence of 
debt, an obligation which must be met, a promise to pay dollars, and tnust be paid or 
the Government dishonored. Second, that the " dollars " promised in these obligations, 
greenbacks and bonds alike, are the coined dollars of the mint. We may fund our obli- 
gations over and over, but never until our creditors get these dollars, or what they 
accept as equivalent, can our debts be paid. Third, that it is desirable to pay off this 
debt, and reduce and stop the interest as rapidly as we can, for this is the only real and 
certain way to get rid of the expenses and taxes necessarily involved in their contin- 
uance. Ananias and his tribe constantly talk as if the Government grew rich by going 
into debt, and the people grew prosperous by paying taxes to meet the interest. There 
is nothing sillier than this, and but one thing more dishonest than the schemes built 
upon it, and that is open repudiation. 

THE SIXTH CONSPIRACY— DEMONETIZING SILVER. 

Ananias tells us that tTie mint and coinage act of Februarj^ 12, 1873, had for its 
object the demonetization of silver in order to produce a further contraction of the cur- 
rency, to prevent the payment of bonds, and to increase their value. If this was their 
purpose, the conspirators were but stupid blunderers, since they utterly failed as to 
each one of the alleged objects. 

I. Silver was not '''' demonetized.'*'' The act expressly provided that all standard 
silver dollars heretofore coined should contijiue to be full legal-tender money at their 
face value. The act stopped the further coinage of these dollars, but it did not dis- 
credit those in existence. The act did establish the gold standard, discontinuing 
the old silver dollar, for the reason that it was then worth $1.03 in gold, as stated on the 
floor of the House by Hon. William D. Kelley, who was Chairman of the Coinage Com- 
mittee, and hence one of the conspirators. The bills proposing to omit the silver 
dollar from the list of coins were before Congress for three years, were frequently 
under discussion, but not one single member of either the House or Senate ever pro- 
posed to piU or keep the standard silver dollar in the list of coins. 

But it was proposed to coin instead a dollar of 384 grains — the equal of a French 
five-franc. This was finally abandoned, and a new coin with a new name, a "trade 
dollar," of 420 grains, was substituted for export in the China and Japan trade. The 
silver dollar being worth more than the gold dollar, was worth more as bullion than as 
coin, and hence would not stay in circulation, but was sent abroad. Hence, in 1806, 
President Jefferson stopped their coinage, andy(7r thirty-five years the total number 
coined was 1,621. And from the establishment of the mint, in 1793, to the passage of 
the act of 1873, the total number coined was only 8,031,238. The "dollar of thedad- 
dies ' ' was therefore an exceedingly rare bird. It is true that after the passage of the 



14 

act there was a great decline in the price of silver. But this was not foreseen and no 
bi-metalist in Congress predicted any such result. The objects of the act were to raise 
and systematize the mint and coinage laws, and to provide for the more extensive coin- 
age of gold and silver, as one of the preparations for the resumption of specie pay- 
ments. And these objects were effectually accomplished, while dropping one of the 
old coins was merely incidental. 

ACT OF 1873 EXPANDED CURRENCY. 

2. This coinage act did not contract the currency, but, on the contrary, greatly 
expanded it. The Director of the Mint estimates that the total of specie in the coun- 
try at the time of the passage of this act was $140,000,000. Of this, $135,000,000 was 
gold and $5,000,000 was silver. The utmost contraction possible, therefore, if silver 
had been demonetized, was to drive out this $5,000,000. But during the four 3" ears that 
the dollar was omitted from the coinage there was coined of silver in our mints $75,- 
096,024. An increase of silver money from five millions to eighty millions was not 
much of a contraction of the currency. 

3. Neither did this act stop the payment of bonds or increase their value. From 
Jtdy I, 1873, to July i, 1893, the principal of our interest-bearing debt had been 
reduced $1,125,446,850, and our interest account $75,155,610 per year. As there are 
now outstanding only about one-third as many bonds, and they are drawing less than 
one-fourth as much interest, one would be justified in saying that the object of this act 
was to increase the payment of bonds and the reduction of their value to the holder — as 
indeed it was, in connection with other acts. If, as Ananias says, English capitalists 
paid an agent $500,000 to come to Washington and secure the passage of this act for 
the purposes named, they paid pretty dear for the whistle, and then failed entirely to 
get the whistle. 

4. It is 'true that dropping the dollar from the list of coins proved to be un- 
fortunate, but for reasons unforeseen when it was done and not for those given by 
Ananias. The concurrent change from silver to gold by Germany, the United States 
and other nations, the wonderful development of our silver mines, the great falling off 
in the demand for silver in the Indian and other Asiatic trade and similar causes so re- 
duced the demand for the white metal that the market price rapid!}' declined. Our 
restoration of the standard dollar to the list of coins, immense purchases and coinage 
of silver under the Bland-Sherman act, and heroic efforts to restore the relative value 
of silver and gold have been in vain. We have been compelled to desist and to repeal 
the silver-purchasing laws. With a full and declared purpose of maintaining a currency 
of both metals we find ourselves unable to maintain a parit}^ at the present legal ratio 
and go on with further coinage. Nothing remains for us but to stop, to let the burden 
of this depreciation fall in part on other commercial nations also, and to stand ready to 
assist in the recovery of the value of silver by an international agreement. We are a 
great and a rich nation, but we cannot alone bear the whole burden of silver deprecia- 
tion. Our withdrawal from under the load is already being felt in Europe, and in the 
near future we may expect an agreement upon some plan of cooperation. 

5. But what should Ananias and his tribe care for the demonetization of silver ? 
Have they not declaimed against all metal money as an antiquated and expensive folly, 
asserting that to base paper money on specie was alwa^-s to court disaster; that the ma- 
terial of money need have no value itself; that money was whoU)' the creature of law, 
and should consist entirely of Government notes having a full legal-tender power in the 
payment of debts, and receivable and payable for all public dues? Have they not told 
us that all that was necessary to make Government notes a perfect money was the 
''fat'' of the Government declaring them to be so; that all the redemption the}^ 
needed was to be convertible into a three per cent, bond, and this bond in turn pa)'able 
in these notes? Here was a perfect financial perpetual motion, notes for bonds and 
bonds for notes, in eternal succession. That the advocates of this scheme should de- 
nounce the demonetization of silver is sheer hypocrisy. If sincere, they would rejoice 
at it as a step in the right direction, and would demand the speedy demonetization of 
gold as well. The fact is that all the Ananiases wa?it is " cheap money.'" If they can 



15 

only get trusted in buying farms, or food, or clothing, and then be permitted to pay 
loo'cents' worth of debts with seventy-five, or fifty, or thirty-five cents' worth of paper, 
they can be perfectly happy. 

THE SEVENTH CONSPIRACY— RESUMPTION OF SPECIE 

PAYMENT. 

The final "atrocity " charged against the conspirators was the act of January 24, 
1875, providing for a resumption of specie payments on January i, 1879. This, we 
are told, " could only exist by the destruction of the greenbacks and fractional currency 
upon which the people paid us interest," and the issue instead of additional bonds with 
interest added to the burden of " the debt-ridden people." Of course, Ananias docs 
not condescend to give us figures from official sources to sustain these charges. Clip- 
pings from newspapers and vigorous denunciation are so much easier and more con- 
genial. But let us patientl}^ look at the facts. 

1. On July I, 1875, there were outstanding ^37, 904, 570 of fractional currency. 
Of this amount there was still outstanding June 30, 1893, $6,900,504. Hence there has 
been retired about 1:31,000,000 of this currency. To replace this we have fractional 
silver outside the Treasury, $65,469,866, more than twice as much. On the first date 
there were outstanding greenbacks $349,686,335, on the last date $346,681,016, a loss 
of $7,726,992. But there was also a reduction of National bank note issues between 
those dates of $175,694,136, a total of $196,503,488. To replace this we have of Treasury 
notes, of gold and silver certificates, $572,189,020, and of gold coin and silver dollars 
outside the Treasury, $465,465,336. 

In short, as Secretary Carlisle puts it, there was, July /, /(S'/j, a total circulation of 
all kinds of money, $754,101,947, a per capita to the population of $ij,i6 ; and on July 
7, iSgs, a total of $1,596,701,245, a per capita of $2^.85. This does not include the 
$726,701, 147 additional, which was in the Treasury. Besides, in 1875, the paper cur- 
rency was worth 89 cents on the dollar, while it is now all worth 100 cents. The per 
capita has been increased $6.69, the actual money doubled, and the value of the paper 
increased 11 percent, on the dollar. A fearful result of resumption, is it not? 

2. To accomplish this result there were sold of bonds, $65,000,000 of 4>^ per 
cent., $30,500,000 of 4 percent., a total of $95,500,000, with an annual interest charge 
of $4,145,000. But the refunding and debt-paying process was going on, and the actual 
increase of the bonded debt was $74,967,400, and an actual reduction of the annual 
interest charge of $13,081,912. This was the immediate result, while the continuing 
result has already been given, iu the reduced debt and interest, up to the dates shown 
in the last annual reports. 

CONCLUSION-THE TRUE SITUATION. 

1. On reviewing this little pamphlet every well-informed person is first aston- 
ished at the vast amount of lying which has been done in so little space ; and next in- 
dignant at the vituperation heaped on those who, as officers of the Government, and 
lenders of money in its sore necessity, were engaged in saving the Nation's life ; while 
not one wordoi condemnation is uttered against those ivho brought about and took part 
in the Rebellion— that Pandora's box of all the evils. Had knowledge informed the 
brain, and truth guided the pen, the " conspiracy " against the Union, which made the 
years of Buchanan's Administration one long preparation for secession and war, would 
have been properly exposed and denounced as the original fountain of all our financial 
woes. But no. Those who borrowed and those who lent the sinews of war are the 
only objects of misrepresentation and calumny. 

2. Nor can it escape the attention of any intelligent reader, that while one financial 
measure of the Government after another is vilified as a conspiracy to rol) and enslave 
the people, not a single alternate and better course is proposed. How to get the nionev 
necessary to carry on the war at less cost ; how to pay off the public debt on betteV 
terms ; how to restore the public credit without a return to specie payment, is not eveij 



16 

hinted at. The entire implication is, that the Government ought to have issued indefi- 
nite amounts of greenbacks without any provision whatever to pay them ; that it 
should have taken no steps toward a return of specie payments, the restoration of the 
public credit, or the payment of the public debts. In short the only inference left us 
is that billions of Treasury notes should have been issued, to die in the hands of the 
people,, a.n6. thus rob and impoverish them, without an effort to prevent it. Had this 
been attempted, the Rebellion would have been successful, the Confederate notes and 
bonds might have been paid, the United States would have ceased to exist, and its notes 
would have had the fate of those of the defunct Confederacy. 

WHILE OTHER NATIONS MARVEL OUR ANANIASES CURSE. 

3. While the heroic and successful efforts made by the United States to borrow 
sufficient money with which to carry on the war, and the equally heroic and successful 
efforts it has since made to pay its debts and retrieve its credit, have been the fuarvel 
of other nations, and have received unstinted praise from the ablest statesmen of Europe, 
our own Ananiases have not one word of commendation. Abuse and curses are heaped 
on our great leaders, because out of the surging maelstrom of war and debt they did 
not bring forth a financial paradise from which labor, poverty, and suffering were to be 
forever banished. And men and women who never owned a thousand dollars in their 
lives set themselves to find fault with those who obtained and distributed billions of 
dollars in the National cause. The world never saw a parallel of financial recovery equal 
to that exhibited by the United vStates. But to this the tribe of Ananias is oblivious. 

4. Nor is one intimation given of the fact, or one word of praise bestowed, on that 
management of public affairs which has enabled the United States to develop its 
resources and increase its wealth, in spite of war, debt, and hostile party criticism, 
with unparalleled rapidity. In i860, with a population of 31,443,321 we had a volume 
of wealth of $16,159,616,068, an average of I514 per head. In 1890, after all these con- 
vulsions and conspiracies, we have a population of 62,622,250, a volume of wealth of 
165,037,091,197, showing a per capita of 11,039. 

5. Nor can Ananias be induced to consider that the grand results indicated have 
been accomplished by a constant reduction in the extent and volume of taxation, 
equally marvelous in the eyes of other nations. 

Under the stress of war, tariff taxes had to be levied on almost every article of 
foreign importation, regardless of whether it could or could not be produced at home. 
Under the McKinley law 55 per cent, of our imports came in free of duty, and the 45 per 
cent, which continued to pay duty were such as directly entered into competition with our 
own productions. Under the stress of war, internal taxes were levied on almost all 
manufactures, professions, legal papers, incomes and other accessible sources of reve- 
nue. These have since been reduced again and again, until after the Republican legis- 
lation nothing remained but a tax on spirits, malt liquors, tobacco and oleomargarine — 
the latter rather to regulate the sale than for income. 

By the acts of July 13, 1866, and March 7, 1867, the reduction of internal taxes 
from the schedule of the preceding year was $103,381,199. By the acts of February 3 
and March 31, 1868, the reduction was $54,802,576. By the act of July 14, 1870, the 
reduction was $55,315,321 ; and from the tariff schedules, $26,054,748. By the act of 
December 21, 1871, internal revenue, $14,436,862. By the act of May i, 1862, tea 
and coffee were transferred to the free list, a tariff reduction of $15,863,847. By the 
act of June 6, 1872, internal revenue $15,807,618, and tariff $15,278,915. By the act 
of March 3, 1883, internal revenue $40,677,682, and tariff $20,855,799. By the act of 
October i, 1890 (McKinley law), internal revenue $10,327,878, and tariff $60,936,536 
{placing sugar on the free list). These figures need no comment. 

With reduced debt, interest, and taxation, such as is shown by the Treasury 
reports; with the immense development of our railroads, manufactures, and States 
beyond the Mississippi ; with our increase of population, wealth, saving, and specie, 
the Ananias who can do no better than to become a "calamity howler " must simply 
.be left " to perish in his own corruption," while this great Nation of ours pursues its 
onwajd and upward way. 



1 



nERCER ON COIN REDEMPTION FUND, 



An Honest Dollar Needs no Apology, 



si^eeoh: 



OF 



Hon. DAVID H. MERCER, 

OF NEBRASKA, 



IN THB 



House of Representative®, 

Thursday y Febfuary jj, i8g6. 



"WASHINOTON, D. a 
18QQ. 



MERCER ON COIN REDEMPTION FUND 



An Honest Dollar Needs no Apology. 



MR. MERCER said: 

Mr. Speaker: I am opposed to the Senate substitute. So is the country. 
The eternal, never-ending discussion and agitation of the free coinage of silver 
question in the American Congress at this time is full of damage to our indus- 
tries and to our growth. It gives unrest in business circles, and makes our 
credit a football in the marts of the world. How many times must the Senate 
pass a 16 to 1 proposition before realizing that the country is fully informed as 
to its opinion on that subject? Unless its zeal in this respect is soon abated 
I fear every motion to adjourn will be coupled with a free coinage amendment. 
It is talk, talk, talk, and the money thereby wasted would feed and clothe a 
million. If, instead, it would act, act, act, there would be less demand for 
an election of Senators by the people. Nothing can be accomplished for free 
coinage of silver this Congress; then why agitate the question? 

The great conventions will soon assemble and the nominees thereof can go 
before the country on this proposition and allow the people to decide it at the 
polls. Such a course would be true economy. If the act of 1873 was a mis- 
take — and upon that proposition people may honestly differ — how can we rec- 
tify the mistake, if it was a mistake, at this late day by returning to the finan- 
cial condition existing prior to the passage of that act? Certainly not by pass- 
ing this substitute; certainly not by reenacting the law which was repealed by 
the act of 1873. Why? Because conditions — and conditions over which we as 
a Government have no control— have radically changed. When we passed the 
act of 1873 many of the leading powers of the world followed us with similar 
legislation, and a revolution in finance the world over ensued. Would it not 
be a dangerous experiment for this country to retrace its steps and re-estab- 
lish a financial system which existed prior to 1873 without the company of the 
same influence which joined us in our original course? I think so, sir, and I 
believe the experiment would be fraught with much danger. 

AN IL.L.USTRATION IN POINT. 

An illustration in mind would not be out of place at this time. A few yean 
ago a conductor on a motor line in the city of Omaha, and, by the way, we have 
the best system of electric street railways in the world in our city, was injured 
by a collision of cars, his right leg being badly crushed. An inexperienced 
physician who happened to be near took charge of the case and advised amputa- 
tion. He had just finished the operation when a skillful surgeon arrived. In 
a moment he saw that a blunder had been committed, and he roundly abused the 



physician for unnecessarily sacrificing the man's leg; but that did no good. The 
leg could not be returned to its place. So it is with the act of 1873; if a mis- 
. take then, its restoration is an impossibility now, for every change in the finan- 
cial world since that time is against such a course. I am a bimetallist, a sin- 
cere bimetallist, and not a silver monometallist, and I believe that until the great 
commercial nations of the earth meet in harmony upon a proposition to increase 
the mintage of silver, America will not be justified in taking such a step alone. 

In my opinion, free coinage of silver by this country alone and unaided, in 
the face of affairs elsewhere, would drive us to a silver basis so rapidly that we 
could not exchange our property in time to avert bankruptcy. I live west of 
the Missouri River, and, for one, deny that that stream is the dividing line in 
America between sound finance and inflation, between the payment of honest obli- 
gations and repudiation. Nebraska is the great agricultural State of the Union. 
Her people rank first in point of intelligence in the country, and although now 
and then a crevice is made in her stability through which crawls and squeaks a 
man apparently anxious and willing to discredit her at home and disgrace her 
abroad, such misfortune is only temporary, for the sober second thought of her 
broad-minded, patriotic people soon reasserts itself and her reputation for protec- 
tion, sound money and stalwart Republicanism is again intact, 

FREE COINAGE IN PRACTICAL. OPERATION. 

There was a time when I could be intimidated by the orator who asserted with 
so much vehemence that 900,000,000 silver-using people — free-coinage-of-silver 
people, if you please— were demanding that we join them, both in the practice and 
demand, and to heed not was to lose their trade and treasure; but since I have 
had the opportunity to visit China, where reside 400,000,000 of these people, and 
to touch at India, where we find 300,000,000 more, and knowing from equally 
reliable authority that the remaining 200,000,000 is made up of people similar 
in kind to the 700,000,000 referred to, much of the scare has vanished. To cite 
China's system of finance as a proof of anything but imbecility is an insult to 
intelligence. China has no system of finance, and her money is of as many kinds 
as Joseph's coat had colors. It is true there is a mint at Canton, and it issues 
a silver dollar, a dollar of equal fineness and intrinsic value to the Mexican 
dollar, intrinsically worth more than the American dollar, but in the markets of 
China, as well as in the markets of the world, only worth an American 50-cent 
piece, and it is so much discredited at home that it no sooner finds a lodgment 
in the hands of a native than a hole is punctured through it to test its genu- 
ineness. 

FINANCIAL MISERY IN CHINA. 

It is suspected at home and discounted abroad, and has so little circulation 
that it is a stranger to nine-tenths of the Empire, I repeat, China has no mone- 
tary system. In each of the nineteen provinces there is a medium of exchange 
peculiar to the people and customs, and oftentimes the wants and necessities 
are so limited that the people waive the use of any medium of exchange. In 
one province we find silver, pure silver, serving as a medium of exchange, and an 
old pair of scissors does the mintage. Again, bits of opium serve the same pur- 



pose, while in a third pelts and hides take the place of money. In the Hankow 
district, some distance back from the Yangtse River, tea is compressed into 
small blocks or bricks, especially adapted to the Russian market, and known as 
brick tea, and this serves as money, while in other parts of China the small brass 
coin carried down through the ages, and known as "cash," is the only coin 
recognized and receivable as money, and even it fluctuates in value, ranging from 
1300 to 1800 of them to equal a tael, or $1.25 in Mexican money. 

Then, again, thousands of Chinese live like the beasts of the field and fowls 
of the air, on nature; simply exist and have no more use for coin or commerce 
than did Adam and Eve in the Garden of Eden. In the seaport cities of 
China, the large cities, we find banks, generally managed by English capital and 
after a system common in other commercial centres, save that 
the currency issued is of uncertain value the minute it leaves the city limits 
of its place of birth. For example, the great Hongkong-Shanghi Bank, doing 
business at Hongkong, Amoy, Shanghai, and other cities in China, India and 
Japan, issues paper currency — a promise to pay; and although this great banking 
concern is doing business in several cities, the issue of one bank is discounted 
by any other to which it may be presented, while its silver currency has only 
bullion value and is subject to the fluctuations of the London market twice a day. 
As I traveled from city to city I was exceedingly careful not to draw on my 
letter of credit for any more money than I needed in the different places visited 
for fear that I might be oversupplied with a coin or currency which would be 
subject to excessive discounts at the next abiding place. If such be free coin- 
age of silver I will have none of it. 

JAPAN Wllili DEMONETIZE SIL.VER. 

What is true of China applies to India and other countries similarly situated. 
In Japan we find a monetary system, a system national in character, but so full 
of uncertainties that one is reminded of the wildcat banking days of America. 
Values in money and property fluctuate daily, and prices on the London market 
govern all kinds of trade. Japan is the England of the Orient in many respects, 
and she will not much longer be satisfied with a financial system unstable, 
uncertain and insecure while advancing so rapidly in science, manufactures and 
the arts. She will soon demonetize silver. Some of her leading statesmen 
advocate the step to-day, and when this occurs she will command the trade of 
the Orient and threaten that to the East and West, even unto the circling of 
the globe. In doing so she is simply repeating history— that in the ratio which 
a country keeps pace with the commerce and growth of the great progressive 
powers, in the same ratio she approaches the demonetization of silver to such 
an extent that bimetallism and not silver monometallism prevails. 

Japan has already begun her attack upon high wages and well-paid labor, 
and whether she is on a silver or gold basis there will be little difference in the 
injury inflicted upon the commerce and industries of Europe and America. The 
productions of Oriental labor, under the superior guardianship of ambitious Ja- 
pan, are in the markets of the world to stay, and the competition will increase 
in violence with the lapse of time, unless some restrictions are originated and 



enforced. The result of the war between China and Japan has only enlarged 
this field of danger, for the latter country intends introducing modern methods 
among the Chinese, and as a race they can vie with the Japanese in any con- 
tention the moment their supreme egotism is destroyed. 

GREAT BRITAIN WII.I. PRACTICE PROTECTION. 

Already Great Britain, France and Germany have felt the effect of this in- 
fluence in their Oriental trade, and I prophesy here and now that England will 
soon be compelled to both preach and practice protection on that account. 

Japan is smaller in area than California, but her poulation numbers 43,000,- 
000 of the busiest people on earth. Men, women and children, from early 
mom until late at night, incessantly work, work, work, and they can imitate 
any device contrived by human hands. Most of them labor for 10 cents a day 
and save money. The difference in exchange does not give them an advantage 
over America, which could be remedied by financial legislation here or else- 
where. The only cure is a high protective tariff and restricted immigration. To- 
day China and Japan take our gold in exchange for commodities and deliver it 
to England. In 1895 this farce was carried to such an extent that the balance 
of trade between America and these countries was in their favor over $40,000,- 
000. Protection and reciprocity is the only remedy for this unfortunate 
financial tangle. 

This leads me to the true solution of our present financial evil, sir, and 
that is that the money question in America will take care of itself if we will 
only settle the tariff question along strong protective lines. Prior to the election 
of 1892 we heard nothing about a diminishing reserve. In those day confidence 
was abroad in the land and capital and labor were freely employed. The reserve 
received no thought, it created no fe.ar, for this country was so governed as 
to make its receipts equal and exceed its expenditures. Our Republican policy at- 
tracted gold and built up a trade whereby the balances were in our favor. Had 
the American people not wandered after strange gods in 1892 we would still be 
enjoying the good times of the Harrison Administration. We have learned a 
valuable lesson, one not to be forgotten during the next generation at least. 

FREE TRADE TAI.K DISORGANIZED PROSPERITY. 

We now realize that protection protects and free trade disorganizes, and the 
sooner we return to Republican men and measures the sooner will this great 
country recover from the sad plight into which it has been plunged by a party 
which is full of wisdom in defeat but full of blunders in victory. The advent of 
Democracy meant death to protection, and when such a calamity became an as- 
sured fact confidence was shaken, capital retreated behind bank vaults and into 
sundry hiding places, and business languished— aye, became paralyzed and bank- 
rupt. All this did not result because there was not money enough in the country 
for business purposes. The free-coinage advocate always assigns this as one of 
the reasons why the mints should be opened to the free and unlimited coinage 
of silver at the ratio of 16 to 1, and perhaps with some effect prior to the re- 



markable expose of its fraudulency a few days ago, when almost $600,000,000 
in gold was offered for $100,000,000 in bonds, and most of it by the patriotic 
American people. 

This outburst of American confidence in American institutions and Ameri- 
can credit has not only astounded and surprised the financial world, but it makes 
us the cynosure of the bankers and investors of the civilized globe. Let us hope 
that it is the first sign of a returning confidence which always holds sway under 
Republican Administrations, and that it sounds the death knell to financial 
heresies in this Republic. I hear it said that we do not have sufficient money 
in the country to transact our business Why, sir, it is not so much a question 
of the amount of money as it is a question of quality and circulation. I glory 
in the fact that our currency is as stable as the Rock of Ages — worth an hun- 
dred cents on every dollar, and nothing calls it from its hiding place so quickly 
as an intimation that the country will soon be in the control of the Republicaa 
party, a party of bookkeeping and business. Restore confidence and money wiU 
circulate; restore confidence and business will revive; restore confid-ence and 
prosperity will once more reign over a contented and happy people. Free coin- 
age of silver by America alone will not restore confidence, neither will it re- 
store silver to that ideal realm so often pictured by the enthusiast. Such a 
step means silver monometallism, and silver monometallism means Mexicaniza- 
tion. God forbid that we should come to that. 



FREE COINAGE WIIiL. GET NO FOOTHOIiD MERE, 

If we were living the life of the American Indian prior to the time he was 
discovered by Columbus, our law of coinage as well as our law of commerce 
would not concern us. We would have no use for either. But we have out- 
lived that condition in life. We are a great commercial nation, rich in every- 
thing under the sun, and we seek a business intercourse with all nations, all 
people. We desire that we shall not be second to any power on the face of 
the globe in business, in civilization, in peace, or in war. We want our cur- 
rency to be the peer, at least, of any which circulates, and if there is to be a 
"best," we claim that distinction. Free coinage of silver may do for China, 
but it will never gain a foothold in America under present conditions. Without 
it, we will soon lead England in finance, and America will be the clearing 
house of the world; with it we will furnish an apology with each 50-cent 
dollar 

In conclusion, allow me to say that the American people, irrespective of 
party, are a patriotic. God-fearing people, anxious to do right, and full of con- 
fidence in the public servant empowered to represent them. If that servant 
proves honest, conscientious, and courageous in the discharge of his duties, he 
will receive the commendation and good will of his constituency, although at 
times he seems to run counter to its opinions and beliefs. The gentleman from 
Missouri (Mr. Hall) gave utterance to information that has been of common 
knowledge on the floor of this House for some time, that there are members 
of the Senate and House who are at heart and bead opposed to free coinage of 



8 

silver, but through fear of a frowning constituency subvert their otsti views and 
the best interests of the public by voicing and voting in such a manner as to be 
most pleasing to a suffrage they are supposed to represent. 

AGITATION FOR THE ATTAINMENT OF THE IMPOSSIBIiE. 

The Senate has not met the expectations of the country in returning to us a 
substitute hardly germane to the proposition sent it from the House. If that 
body desires to inflict upon this country such a law, let it boldly and manfully 
pass an original bill to that effect and not use it as a rider upon every conceiva- 
ble bill that may stand a chance of passage. The Senate well knew that this 
House would not agree to the substitute; it knew that President Cleveland 
would veto such a measure if passed to him, yet in spite of such knowledge 
the country must be agitated and convulsed by needless attempts at the impos- 
sible. 

I shudder at the consequences of a deadlock, fraught with so much danger. 
I see in it no legislation of benefit to the masses. The President insists upon 
free trade and the single gold standard; the Senate has no ear, no voice, no vote 
for any measure not looking toward the free coinage of silver at the ratio of 
16 to 1, while the House of Representatives, with its large Republican majority 
fresh from the people, asserts itself in favor of saving the country from bank- 
ruptcy and against silver monometallism. The situation is indeed a grave one. 
A deficiency of many millions still stares us in the face, and no sign of its 
removal. The House has expressed a desire and intention to remedy the evil in 
part by passing a revenue bill which even its enemies admit would yield the 
Government $40,000,000 annually; yet because it does not also provide for the 
free and unlimited coinage of silver it is spumed and spit upon by the Senate, 
through a majority made up of Populists, Democrats, and erring Republicans, 

A REPUBL.ICAN TARIFF MEASURE DESIRED. 

I believe the people of America desire that we should expunge from the 
statute books the Wilson bill and restore in its place a Republican tariff meas- 
ure, rich in protection, and then crown it with reciprocity; that we should take 
some steps toward securing an international monetary congress in the interest 
of silver; pass a bankruptcy bill, for this Administration has made such legisla- 
tion a necessity; give to the country such remedial legislation as its urgent 
necessities demand; improve our immigration laws; enunciate as a Republican 
measure a vigorous foreign policy; pass the general appropriation bills, and then 
notify the President, the Senate, and the country that we are ready to adjourn. 
Upon such a record the Republican party could go to the country with the 
dope of receiving the glad tidings: "Well done, thou good and faithful servant." 

The only hope for such a consummation is a Republican victory, complete 
and overwhelming, in November. The responisbility now rests with the people. 
If they do their full duty, I have some hopes of a national salvation; if they 
shirk, the slough of despond and misery will only increase in area. 



EI^ED ON TUK TARIFF. 



SPKECH 



OF 



HON. THOMAS B. REED, 



OF MAINB. 



IN thh 



HOUSE OF REPRESENTATIVES, 



Thursday, February 1, 1894. 



WASHINGTON, D, C. 
1898. 



BE£D ON THE TAKIFF. 



SFEECII 



OF 



HON. THOMAS B. REED, 



OF" ]V[AI1S[©, 



In the House of Represen'tatives, 

Thursday, February z, iSg^f.. 



The House having under consideration the bill (H. E. 486-1) to reduce taxation, to provide revenue 
for ilie Government, and for other purposes — 

The SPEAKER. Under the order of the House, the bill is now open for 
debate for three hours, and the Chair recognizes the gentleman from Maine 
(Mr. Reed). (Prolonged applause on the floor and in the galleries.) 

Mr. REED eaid: 

Mr. Speaker, in this debate, which has extended over many weeks, one re- 
markable result has already been reached, a result of the deepest importance to 
this country. That result is that the bill before us is odious to both sides of the 
House. It meets with favor nowhere, and commands the reepect of neither 
party. On this side we believe that while it pretends to be for protection it 
does not afford it, and on the other side they believe that while it looks toward 
free trade it does not accomplish it. 

Those who will vote against this bill will do so because it opens our mar- 
kets to the destructive competition of foreigners, and those who vote for it do it 
with the reservation that they will instantly devote themselves to a new crusade 
against whatever barriers are left. 

Whatever speeches have been made m defense of the bill on the other side, 
whether by gentlemen who are responsible only to their own constituencies or 
by the gentleman from West Virginia, who ought to have been steadied by his 
sense of -responsibility to the whole country, have one and all, with but rare 
exceptions, placed their authors uncompromisingly, except for temporary pur- 
poses, on the side of unrestricted free trade. 

WIIiSON ISIIilL DIEFEJ^DEB ON PKINCIPIiES OF 

FKJEE TRAB>E. 

It is evident that there is no ground for that hope entertained by so many 
moderate men that this bill, bad as it is, could be a resting place where our man- 
ufacturing and productive industries, such as may survive, can re-establish them- 



4 

selves and have a sure foundation for the future, free from party bickering 
and party strife. Hence, also, there can be no foundation for that cry, so in- 
sidiously raised, that this bill should be passed at once, because uncertainty is 
worse than any bill can possibly be. Were that bill to pass both branches to- 
day, uncertainty would reign just the same. 

This result was inevitable. Although this bill professed to open to the man- 
ufacturers a ne-sV era of prosperity and professed to be made in the interest of 
some of them, the moment it came to be defended on this fioor the great bulk 
of it could not be defended on any other ground than the principles of free 
trade. Hence, in this discussion, the precise terms of this proposed act count 
for nothing, and we are left to the discuswion. of the principles which underlie 
the whole question. That question may not be decided here and now upon these 
principles, but the ultimate decision by the people can have no other foundation. 

After this statement it would be entirely natural that a feeling of weari- 
ness should come over this audience, for if anything seems to have been dis- 
cussed until human nature can bear it no more it is the tariff. Nevertheless 
the fact that the subject is still before the people shows that the last word 
has not yet been said and that the subject has not yet been exhausted or un- 
derstood. 

The history of protection has been most remarkable. Fifty years ago the 
question seemed to be closed. Great Britain had adopted free trade, the United 
States had started in the same direction, and the whole world seemed nbout 
to follow. To-day the entire situation seems to be reversed. The whole civilized 
world except Great Britain has become protectionist, and the very year last 
passed has witnessed the desertion of English principles by the last Biiglish 
colony which held out. This has been done in defiance of the opinions of every 
political economist in England who wrote prior to 1850, and of most of those who 
have written since. 

When you add to this that the arguments against it have seemed so clear 
and simple that every school boy can comprehend them and every patriot with 
suitable lungs could fill the atmosphere with tlie catchwords (laughter), the wonder 
increases that in every country it should still flourish and maintain its vigor. 
Ten years ago it was equally true at one and the same time that every boy who 
graduated from college graduated a free trader and that every one of them 
who afterward became a producer or distributer of our goods became also a 
protectionist. 

THE WMOSiE KACE WESEfl TMAl^ OME MAN. 

The arguments of the political economists, clear as crystal, do not seem to 
have convinced the world, nor, what is much worse, do they seem to hare 
made any substantial progress. On the contrary, these economists have taken 
up the task of tearing each other to pieces, so that to-day there is hardly a name- 
able important proposition on which they agree, and the more the facts of the 
universe are developed the more confusion seems to reign among them. Mean- 
while the world has proceeded in its own way without much regard for their 
theories and their wisdom. I do not mean that studious men have not discov- 
ered great truths and had glimpses of still greater, but in the main they have 
only passed from one inaccuracy to another, because they have forgotten that 
the whole race is wiser than any man. (Applause). 

You and I, Mr. Speaker, cannot hope to do much better than these famous 
men, except so far as we view with tolerance what great masses of our fellow- 
men are doing and assume that they are probably right instead of assuming 
that they are probably wrong in matters which so deeply concern them. 

It is often said that the truth is the simplest. That is so, after you under- 
stand the truth, but when you do not a lie is far simpler. (Laughter). When 



Copernicus discovered the theory of the imiverse it took centuries for men to 
believe it. The Ptolemaic system was so simple that anybody by using his 
eyes could see that the sun rose in the East and set in the West, just lil<6 
the moon, and both in the same way revolved around the earth, and to-day most 
men accept the Copernican theory, not on their own understanding, but on the 
general belief of mankind. 

I shall not, therefore, in what I have to say, be able — being, as I nope on 
the side of truth— to rival the charming simplicit>' of the gentlemen opposite, or 
like them, to compress the universe into the nutshell of a speech. I regret this 
the less because I know that many a philosopher has put the world into a nut- 
shell only to find that the nutshell contained a world in which nobody ever 
lived, or moved, or had his being, and consequently a world which was of no 
human account. 

TISIUTY YEAKS OF PKOTECTBOW. 

I shall not attempt to deal much with the metaphysics of this discussion or 
to cite statistics which have no meaning except to the student, and so often 
mislead even him. I shall for the most part confine myself to large facts which 
are known of all, or can be ascertained in the simplest possible way. 

Whether the universal sentiment in favor of protection as applied to every 
country is sound or not I do not stop to discuss. Whether it is best for the 
(juited States of America alone concerns me now, and the first thing I have to 
say is that after thirty years of protection, undisturbed by any serious men- 
ace of free trade, up to the very year now last past, this country was the great- 
est and most flourishing nation on the face of the earth, (Loud applause on the 
Republican side). Moreover, vrith the shadow of this unjustifiable bill resting 
cold upon it, with mills closed, with hundreds of thousands of men unemployed, 
industry at a standstill, and prospects before it more gloomy than ever marked 
its history— except one— this country is still the greatest and the richest that the 
sun shines on, or ever did shine on. (Renewed applause). 

During that period of growth which lifted us from a position so low that 
we actually had human slavery within our borders to our present condition of 
freedom and prosperity, we struggled through a dreadful war which desolated 
one-half of the country and so strained the resources of the other half, both in 
money and in men, that its impress to-day is visible every year on our tremen- 
dous pension roll, alt^hough almost obliterated from our public debt. After the 
war ceased our prosperity was clouded with a six years' struggle with a dis- 
ordered currency and the reconstruction of labor and industry in the South. No 
nation in the world's history ever passed through in so short a time two ordeals 
so trying and so severe. 

In spite of both these misfortunes not only have we studded the country east 
of the Mississippi all over with mills and workshops, factories and furnaces, 
covered it with railroads, exploited the oil and gas fields of Pennsylvania, In- 
diana and Ohio, and turned into light, heat and production the fierce, imprisoned 
energy of a thousand mines of coal, but beyond the Mississippi, that mighty 
country which some day will astonish the world with its exceeding riches, we 
have built four great trans-continental lines across the Rocky Mountains, 'and 
have driven the great American desert off the maps and off the face of the 
earth. (Applause). 

OUK RESOUSiCES WOT EXHAUSTED. 

Nor have we in any way exhausted the future. This country is ten times 
more capable to-day of further development than it was in ISGO. Let me state 
one little item— sample of a thousand. Only last year, at Rumford, in my own 



ree 



6 

State, was brouglit under harness waterfalls, which will gire to the product 
energies of this country 40,000 horse-power for every day in the year. TIil.. 
hundred and fifty thousand just such horse-power runs to waste every day in 
New England alone. Whenever our citizens are rich enough to employ these 
great resources my hope is that they will be rich enough to consume their 
products themselves. 

So utterly undisputed and so distinctly visible to every human being in this 
audience has been our growth and progress that this hasty outline is all that 
is needed to remind you of one great fact, that whatever the future industrial 
system of this country may be, the past system is a splendid monument to 
that series of successful statesmen who found the country bankrupt and dis- 
tracted, and left it first on the list of nations. 

But we must not leave this matter to our own praises. Let others spenk. 
and above all the citizens of that land which is our great rival, at whose feet 
American statesmanship in this House now sits. 

I have here an article in the Fortnightly Review, wherein Mr. J. Stephen 
Jeans, a British free-trader writer, in December, 1892, declares that— 

America has for maiiy years enjoyed an amazing degree of prosperity, so much so 
Indeed that to use the eloquent words of Edmund Burke "generalties which in all 
other cases are apt to heighten and raise the subject have here a tendency to sink 
It. Fiction lags after truth, inyeuliou is unfruitful, and imagination cold and barren. 

When I read these words I recalled a scene in this House, and said how 
tdifferently men look at the same things. 



¥IEW!§ OF A €0©l.-MI.0€>2>Ei> ER<€lf.ISMMA]V. 

Here is a cool-blooded Englishman, who, in talking of the "not unreasonable 
bopes" — I use his very words— which his countrymen entertain, "that the great- 
est market in the world and probably in the world's history is once again to 
be found lying at the feet of British industry and commerce," declares that 
"America has for many years enjoyed an amazing degree of prosperity, so much 
so, indeed," that he has, to use the words of Burke to say that he cannot even 
describe it. And yet, in this very Hall a member of the Committee of Ways 
and Means, himself a countryman of Edmund Burke and whose wonderful elo- 
quence moved this assembly as I never saw it moved before, allowed him- 
fself, amid "laughter and applause on the Democratic side," to compare this 
amazing prosperity to a "prolonged debauch," from which the country could 
rescue itself only by the free use of the committee's dilution of the original bev- 
erage. (Laughter.) It seems, somehow, almost a desecration to put the facts 
over against the figure of speech. 

Here is a little book of letters of an editor, Mr. Carr, of the Cardiff Mail, 
to his wife. It is full of expressions of surprise over this "wonderful country," 
"phenomenal prosperity," "extent and strength of the enormous interests created 
by the American policy of protection." 

Only last November Mr. W. H. Mitchell, an English lecturer, fresh from 
a three months' visit to our country, addressed the Textile Society of Bradford. 
England. He was here in the interest of trade. Hence what he had to say 
smacks of trade. 
The importance- 
Says he — 
of America as a trade outlet was very obvious. It had G5,00O,GO0 people who spent 
more money on dress than any other people on the face of the earth. Again, in spite 
of the wonderful development which had taken place, the possibilities, he might 
say the certainties, of future progress were marvelously illimitable. 

"Marvelously illimitable." These were his very words. How the mouths of the 
'Textile Society of Bradford must have watered as he detailed to them the hopes 



he had that such fruitage would be lifted to their very lips. (Laughter). But 
of that, by and by. 

Without further quotation, unnecessary for this audience, for whom all that 
a foreigner can say is but a reminder, it only remains to ask if all this 
prosperity has been at the expense of the laboring man, of those who furnish 
service whether of brain or muscle. If it has been at their expense, for one 
I say down with it. The lowest depths of the Wilson bill are not half low 
enough for such a civilization. 

FI50SFERITY OF • THE FEOPIiE.' 

That, hov.-ever, can hardly be so from the testimony itself. "Sixty-five 
millions of people, who spend more money on dress than any other people" on 
earth, and whose "certainties" of progress in that direction are "marvelously 
illimitable," have evidently not been sacrificed to the Moloch of accumulated 
wealth. 

Editor Carr, already quoted, says this country "is the paradise of the 
workingman." All the bigotry of free trade cannot wipe that out. 

The further my inquiries extend— 

Says he— 
the more convinced I beeome that the real truth of the matter is that in this country 
a workman earns twice as much as he would in England, and the cost of his living, 
except in the matter of rent and clothing, is about the same. Even in the matter of 
clothing the difference is not great, excep t as it is brought about by the general use 
of much better clothing. 

Says Mr. Francis Walker in substance, for I quote only from memory, 
and from a newspaper at that, "If the workman of America would be con- 
tent with the meagre life beyond sea* he could save two-thirds of his entire 
wages." 

These quotations, also, are only reminders for you, Mr. Speaker, and all 
who hear me know that the American who has been long enough here to know 
his opportunities has found the best place for wages in the world. 

Lest anyone might doubt the condition of our laborer, and knowing that 
to many men the declaration of a tariff reformer imports absolute verity, 
I cite my eloquent associate on the comnaittee, the gentleman from New York. 
It is not from his speech on the tariff, but from the speech made while the 
Democracy were assuring the country that the repeal of the silver act was 
all that stood between them and prosperity. (Laughter.) 

I>EMO€KATIC EVIIJEMCE ([|fJOTEI>. 

I hold here in my hand the Aldrich report, which comes to me with the approval 
of the distinguished Secretary of the Treasury, and which emanates from a Democra- 
tio Bureau of Statistics. The accuracy of its figures has never been impugned; 
and it shows that never in the history of human civilization have wages been so high, 
measured by gold. (Applause.) 

Lest there should be any . doubt as to the application of all this to our 
own workingmen, I cite again: 

Through Jong strikes and suffering and woe labor has improved its condition in 
tnis country until, by the figures of this Aldrich committee, we find that it enjoys 
to-day the largest proportion of that which it produces that it has ever enjoyed in 
the history of the world. 

We may safely assume, then, Mr. Speaker, that a country which has be- 
come in the last thirty years the "richest country in the world," to quote 
Mr, Jeans again, a country which during all that period was a "paradise" for 
laboring men," does not need to try any dubious experiments. A good thing 
in this world of disappointments is not to be lightly left. A better thing we 
•shuald desert with stiil more reluctance, and nobody but a misguided man 



would leave the best thing ever known in the history of the universe uii!e?»s 
he had such a glimpse of the future as would place him securely among the 
profits and not land him among those unhappy martyrs whose blood is the 
seed of no church. (Laughter.) 

What are the reasons why any change of principle should be had? 

Of course, we are not to change the history of the last thirty years and 
the principles of a hundred years, because some gentlemen specially gifted 
with sonorous voices have distributed epithets. (Laughter.) We are not going 
to risk our all upon fragments of ancient platform speeches, upon loud out- 
cries and abusive language. 

There must be addressed to us some solid arguments, or at least the opin- 
ions of wise men who have proved their wisdom by the actual test of human 
life. Surely we are not going to venture into the unknow'n because political 
econonmists bid us do so while they still leave unproved every principle upon 
which they found their advice. So long as they cannot agree among them- 
selyes on any of their propositions, they cannot be cited as a body to force 
our conclusions. On no trackless future will we venture unless the prospect 
of increased happiness is large enough to justify risk and exposure. 

Is there any example in the history of the world of any nation situated 
like ours who has taken the step to which we are invited? 

T5IE HISTORY OF EMGI.ISM FREE TRABE. 

Some gentlemen, perhaps, are hastening to say that England affords us the 
needed example; that we have but to turn to her history and find all that we 
need by way of examples, just as in the statements of her political economists 
we shall find all that is necessary for advice, for guidance and instruction. Mr, 
Speaker, I have looked there, and I am amazed to find how little the example of 
England can teach. 

According to the usual story that is told, England had been engaged in a 
long and vain struggle with the demon o protection, and had been year after year 
sinking further into the depths until at a moment when she was in her deeiiest 
distress and saddest plight, her manufacturing system broken down, "protection 
having destroyed home trade by reducing," as Mr. Atkinson says, "the entire 
population to beggary, destitution and want," Mr. Cobden and his friends pro- 
videntially appeared, and after a hard struggle, established a principle for all 
time and for all the world, and straightway England enjoyed the sum of human 
happiness. Hence, all good nations should do as England has done and be happy 
ever after. (Laughter), 

This fairy tale has not the slightest resemblance to history. England, after 
three centuries of stationary life, during which the w^ages of its laborers re- 
mained without change, at the beginning of this century began to feel the pulses 
of a new life. Wages then commenced to rise, and in 1840 were 80 per cent, 
higher in money than in 1800, and, measured by purchasing power, w^ere 90 per 
cent, higher than ever before. Coming as this did, right after three centuries 
of stagnation, it showed the great power of two things, protection and the es- 
tablishment of the factory system. For England was enormously protected, 
not only by duties such as we have, but by the laws which forbade the expor- 
tation of machinery, whereby she obtained or sought to obtain a monopoly of 
steam-driven methods. 

THE INVEWTIO]?^^ OF JAMES WATT. 

It had so happened that Erigland's development, owing to her insular position 
and her early efforts to obtain the results of skill which caused her to im- 
p',>rt Fiemiyh weavers, to receive tiie xiugiienots driven out of France, to wel- 



9 

come workers from everywhere, and in every way to encourage manufactures, 
had reached such a point that the invention of the steam engine was in her 
grasp and possible to her alone. Whoever has examined, even in the most 
cursory way, the history of the long line of inventions which culminated in the 
steam engine of James Watt cannot fail to be satisfied that the condition of 
England at that period led to that line of invention, and that nothing else 
could. AYith the steam engine and the factory system England could so utilize 
human labor that no nation in the world could compete with her, no matter 
what the wages were, until the invention passed her borders. 

Unfortunately, England at that time and for years afterward had no con- 
ception of its duty to its workingmen. The only limit of work was human 
strength. It took the fiercest struggle to get slight remission of labor even for 
children. Shorter hours of labor were scorned, not only by Cobden and 
Bright, but by every political economist of England, even down to 1883, when 
Bonamy Price denounced shorter hours of labor as a "repudiation of the great 
doctrine of free trade." The sole idea of the political economist of that class 
has always been as low wages a^ possible, as long hours as could be, and a 
product of as cheap a price as possible. 

England also was a country where in the main the raw materials were 
scanty and few in number. Even the raw material of labor, wheat and other 
breadstiiffs, could not be produced within her borders in sufficient amount for 
the consumption of her workers. Naturally enough her theory of low prices for 
labor prevented a reasonable division of the tremendous increase of production 
caused by the steam engine, and restricted her own market, and in 18M) she 
found herself in manufactures entirely ahead of her consumption. Her man- 
ufactures had grown out of proportion and could no longer subsist on English 
patronage alone. The workmen were pressing them for that regular increase 
of wages which I shall by and by show to be the natural progress of civiliza- 
tion, and therefore manufactures commenced their agitation against the corn 
laws which resulted in their repeal. 

REPEAIi OF TTME COItM I.AWS. 

Was that crusade the same as is waged here to-day? Are the gentlemen 
of the Ways and Means Committee legitimate successors of Bright and Cobden 
and the Anti-Corn Law League? Not the least in the world. That was a 
fight by the manufacturers. This is a fight against the manufacturers. The 
manufacturers then desired no protection whatever. Tura over this big vol- 
ume of Cobden's Speeches until you come to the twentieth speech, seven years 
after he began; you will find hardly one allusion to protective duties to manu- 
facturers, and even in the twentieth speech they are only alluded to to reiter- 
ate the declaration made in 1838, when the Corn Law League began, that all 
duties were to be abolished so as to make food cheaper. (Applause on the Dem- 
ocratic side.) I am glad to see that my Democratic friends recognize a bit of 
truth, but I am afraid it is by mistake. It so happens, Mr. Speaker, the corn 
laws were not, as these Democrats in their ignorance imagine, for the protec- 
tion of the farmer. (Laughter.) What Cobden was fighting was an odious law 
enacted to enhance the price of bread, not for the benefit of the farmer, but of 
the aristocratic owner of land. Workingmen were clamoring for increase of 
pay. The manufacturers knew that decrease of the price of wheat was the 
equivalent of higher pay. Men do not work for money; they work for money's 
worth. 

I have said the corn law was an odious law. It was more than that. In 
its workings it deprived the poor of food and put the enhanced price into the 
pockets of those who toiled not nor spun. Had that enhanced price gone to 
the farmers ana iajm laborers, it might have been defended to-day on the 

R.— IN. 



10 

Ipround that it was a fair means of distribution among the farmers of their 
share of the wonderful gains of the earlier manufacturing. But as it was, no 
more unjust law was ever attacked. Meantime what was the attitude of the 
manufacturers as to their own protective duties? Why, by the aid of these 
protective duties and the inventions they led to, they had grown so powerful, 
had machinery so superior, and the factory system so firmly established they 
could hold their own markets, beyond clamor or dispute, with duties or without. 
No nation with capital as great and machinery as useful and productive, and 
wages of skilled workmen lower by more than one-third, hung threatening over 
her border. Her machinery was so superior that even the low wages of other 
countries could not affect her. 

MOTIVE OF FRE£ TRADE IW ENGIiAN©. 

Not only were these manufacturers in condition to permit the duties to be 
taken off, but they knew it themselves. Not only did they know it but they 
avowed it; not in a corner, but to Parliament itself. 

I have here Hansard for February 8, 1842 (volume 60, page 133), where the 
Marquis of Lansdowne presents the petition of the woolen manufacturers of 
England, asking that all duties be abolished, including their own, but especial- 
ly the corn laws. On page 137, of the same volume, Lord Brougham declared 
that prior to that time he had "laid upon the table a petition from persons 
authorized by all the great manufacturing bodies of the Kingdom. They 
prayed for the repeal of every duty levied under the pretense of protection." 
I am using the very language of Lord Brougham. This, then, was a fight made 
by the manufacturers for the manufacturers against the aristocratic land-own- 
ers over the question of cheap food in an island that could not produce a sup- 
ply for its workingmen. 

The men who made the fight were not philanthropists or saints. They were 
good, honest, selfish men, struggling for their own interests and never lost sight 
of them. Down to their latest day they resisted lesser hours of labor, and 
were deaf to all improvements which led to the elevation of the working classes. 
They held firmly to the doctrine that "as wages fall profits rise." 

To sum this all up, England when she became free trade was a workshop 
wh«rein was manufactured the raw material of the rest of the world. Of raw 
material she herself had none. Her coal and iron and the invention of the 
steam engine had developed her manufactures so out of proportion to the wages 
of the workmen that she must have a larger market. At that time the only 
idea of a larger market was one that had more consumers. The notion that 
the market could be enlarged by those who were already consumers had not en- 
tered into the popular thought, yet her workmen were clamoring for more pay. 
Tariff had really ceased to be a protection except on com, and not on that 
in any true protective sense. It was only a tax like that on sugar. It made 
food dear. Repeal of the corn laws meant an increase of real wages. Repeal 
of tariff on manufactures meant nothing. The whole crusade of 1840 was- 
for free food, and Cobden nowhere says anything else. Protection in our mod- 
em sense, is never mentioned in any one of his free trade speeches. 

ENGIiAND'S CHAUfGE OF POIilCY KO FARAIilLEIi. 

After this review of the story of England's change, will any man dare ta 
say that he finds therein any justification for the present deed of violence which 
is called the Wilson bill? 

Suppose England, instead of being a little island in the sea, had been the 
half of a great continent full of raw material, capable of an internal commerce- 
which would rival the commerce of all the rest of the world. 



11 

Suppose every year new millions were flocking to her shores and every one 
of those new millions in a few years, as soon as they tasted the delights of a 
broader life, would become as great a consumer as any one of her own people. 

Suppose that these millions and the 70,000,000 already gathered under the 
folds of her flag were every year demanding and receiving a higher wage and 
therefore broadening her market as fast as her machinery could furnish produc- 
tion. Suppose she had produced cheap food beyond all her wants and that 
her laborers had spent so much money that whether wheat was 90 cents a 
bushel or twice that sum hardly entered the thoughts of one of them except when 
some Democratic tariff bill was paralyzing his business. 

Suppose that she was not only but a cannon's shot from France, but that 
«very country in Europe had been brought as near to her as Baltimore is to 
Washington, for that is what cheap ocean freights mean between us and the 
European producers. Suppose all those countries had her machinery, her skill- 
ed workmen, her industrial system and labor 40 per cent cheaper. Suppose under 
that state of facts, with all her manufacturers proclaiming against it, frantic in 
their disapproval, England had been called upon by Cobden to make the plunge 
into free trade, would she have done it? Not if Cobden had been backed by 
the Angelic Host. History gives England credit for great sense. (Laughter and 
applause.) 

SIOMC: INCAUTIOUS TRUTHS FROM ENGIilSHMEW. 

While our wiseacres are reading British books of 40 years ago with the 
emotions of great discoverers, what do the English themselves say about the 
actual facts? They come here in shoals. Naturally they do not like our system; 
but for it they could do our manufacturing for us. Nevertheless, prejudiced and 
prepossessed as they are, they are startled into some incautious truths. Says 
Mr. Jeans, whom I have already quoted about the "amazing prosperity" of the 
United States: 

It requires, I think, unusual temerity to allege that the tariff system of the 
United States has been a failure for that country. 

What a prejudiced English free trader regards as "unusnal temerity," and 
which he might have called unexampled rashness, is not only exhibited by 
our Committee of Ways and Means, but by every gentleman who can recite 
Sidney Smith's discourse on the taxed Englishman under the impression that he 
is delivering an original speech. Mr. Carr, too, remarks the strange phenomena. 

I am— 

Says he — 

— a oonvinoed free trader. Proteotion is to me an economical heresy, the fraud 
and folly of which— 

How like one of our own dear Southern statesmen he sounds — (Laughter). 
the fraud and folly of which are capable of mathematical demonstration. • ♦ • 
And yet throughout the length and breadth of this vast continent one is almost 
daily brought face to face with solid, indisputable facts that seem to give the lie 
to the soundest and most universally accepted axioms of political economy. 

Yes, not only do "solid, indisputable facts seem to give the lie to the sound- 
est and most universally accepted axioms of political economy," but they 
do give it, and so does the whole history of this country. If what he calla 
*'the soundest and most universally accepted axioms" had been axioms at all, 
this country ought to have been permanently for 30 years in the situation whiob 
it is now in temporarily, after 11 months of this free trade nightmare. W« 
ought to have been halting in every branch of manufactures; we ought to have 
•topped progress and faltered to the rear, for we were wasting both capital 
and labor in unprofitable employment. 



12 



RISE ©F WAGES SINCE 1860. 

Our TvorkmeB, penned up in our little country while Kuglishmen reveled in 
the markets of the world, ought to be impoverished beyond all the experience 
of history. Instead of that the Aldrich report, which deserves the high encomium 
of the gentleman from New York (Mr. Gockran), "with the approval of the dis- 
tinguished Secretary of the Treasury," even if it does "emanate from a Dem- 
ocratic Bureau of Statistics," shows that since 1860 money wages have risen 
68 per cent. Or if you say, and you would be right in so saying, that wages 
should be measured by what they will buy, the result is still more striking. 

The same report shows that, measured by prices of things bought, wages 
have risen, real wages 79 per cent. By which I mean to «ay, that where our 
people in 1860 received a dollar, our people have now one dollar and sixty-eight 
cents and six mills in money, and a dollar and seventy-nine cents and one mill 
in consumable wealth. During the same period the hours of labor, by average 
in all the occupations calculated, have fallen from eleven to ten. If you 
count that and reckon the man's hour saved to be worth as much to him as it 
used to be to his employer — and it is — you have real wages raised 97 per cent, 
and you find the wage earner to-day, after thirty-three years of protection, with 
$1.97, where in 1860 he had but a single dollar. The history of the world shows 
nothing like it. The Aldrich report declares that there exists no thorough digest 
of facts relating to European wages, but if you will show me any figures 
of increase at all approximating what I have just described in free-trade Eng- 
land, you will discover what my search has not been able to find. 

With wages rising, prices of manufactured goods falling, with lessening 
hours of labor, what more do you want except more of the same sort? (Ap- 
plause on Republican side). 

Tlae truth is that this very question of rising wages is what makes a good 
many men free traders. People with fixed incomes think that anything which 
raises wages is inimical to them. Manufacturers who have foreign markets are 
naturally anxious to have wages on the foreign standard, and when a great 
cocoa manufacturer in Boston and a great agricultural tool-maker in Philadel- 
phia proclaim themselves on the side of free trade, we find in both cases a large 
foreigTi trade and along with it a desire for foreign wa^es for their working- 



WAGES MUST BE STEABSI.Y IB^CREASING. 

I confess to you that this question of wages is to me the vital question. 
To insure our growth in civilization and wealth we must not only have wages 
as high ae they are now but constantly and steadily increasing. (Loud ap- 
plause on the Republican side). No applause for this sentiment I notice on the 
Democratic side. This desire of mine for constantly increasing wages does not 
have its origin in love for the individual, but in love for the whole nation in 
that enlightened selfishness which recognizes the great truth that your fate and 
mine, Mr. Speaker, and the fate of your descendants and mine are so wrapped 
up in the fate of all others that whatever contributes to their progress gives 
to us all a nobler future and a higher hope. (Applause on the Republican side). 

I do not mean to use the word "contribute" as adequate to describe the in- 
fluence of wages on human progress. That would be to belittle the subject. In 
my judgment upon wages and the consequent distribution of consumable wealth 
ie based all our hopes of the future and all the possible increase of our civiliza- 
tion. The progress of this nation is dependent' upon the progress of all. This 
is no new thought with me. Our civilization is not the civilization of Rome, a 
civilization of nobles and slaves, but a civilization which tends to destroy dis- 



13 

tinction of classes and to lift all to a common and higher level. (Cheers on the 
Republican side). 

There are soace men in this world and in this nation who do not like that. 
When I talk about wages I use the word in itt^ broadest sense as the price and 
value of service whether of brain or muscle. When I speak of constant and con- 
tinuous increase of wages I do not mean the caprices of benevolence or of 
charity, or the fantasy of a mind longing for the impossible. 

MA^'S TASTES irxfFI.UEMCEI> BY HIS FROSFEKITY. 

The increase of wages which the service seller ought to have and the only 
useful increase he can ever get will be by the operation of natural laws work- 
ing upon the opportunities which legislation may aid in furnishing. The increase 
will never come from the outside, will never be the gift of any employer. It 
must come from the improvement in the man himself. Can you get a carpenter 
or bricklayer to work for 25 cents a day? He did it in England in 1725. To« 
day in the United States it is a poor place where he cannot get ten times that 
5um. Why does he have to have ten times as much? Because the carpenter 
of to-day could no more live as did the carpenter of 1725 than he could live 
m a cave and hunt snakes for food. The difference in wages means the differ- 
ence in living, and the $2.50 is as much a necessity to-day as the 25 cents was 
a hundred and fifty years ago. 

Man is not a mere muscular engine, to be fed with meat and give forth effort. 
Man is a social being. He must have whatever his neighbor has. He cannot 
grow unless he does. Every growth implies a larger consumption of con- 
sumable wealth, and by consumable wealth I mean whatever is made by man 
and contributes to his enjoyment, whether it be a loaf of bread, a novel, or a 
concert. The more a man wants of consumable wealth the more his wages 
are likely to be. But by wants I do not mean any wild longing for what is 
beyond reach, but such wants as are in sight and to supply which he has such 
longing as will make him work. 

What is the rule and measure of wages? There has never been a subject on. 
which so much ingenuity has been wasted and where the political economist 
tias so befogged the world. He had a fund set apart in his mind which he called 
the wage fund. Divide the wage fund by the number of service sellers, having 
due regard to difference of service, and there it was plain as mathematics. 
True, nobody could calculate the wage fund, nobody had ever seen it. It was 
in nobody's bookkeeping, but it was a comprehensive answer and that was what 
he was after. Others of his disciples to-day dispose of it by the catchwords "sup- 
ply" and "demand," and though the listener had acquired some words he had 
acquired very little knowledge. 

KE1LATI0N OF WA€}ES TO COISTSUMPTIOW. 

In thus speaking slightingly of "supply and demand'' I do not mean to say 
that the relation between the worker and the work has no influence on wages. 
What I say is that it in no sense solves the problem. Only last week in this 
very city the builders, and material men, and the workers met together to see 
if in response to oversupply compared with demand concessions could be made. 
The material men were ready to yield, but the workmen, whose labor was the 
only perishable article involved, utterly refused. According to supply and de- 
mand they ought to have been hustling each other to see who could get into 
the job. Instead of that they are ready to struggle and to endure privations 
rather than give up what have become to them necessaries of life. Of course 
in time they will have to submit unless this bill is beaten, but there are limita- 
tions beyond which you cannot go. No nation can endure in peace any cut which 



14 

sgoes into the quick. Necessities born of social life and advancing civilization 
are the real measure of wages. 

This question of wages is all-important as bearing upon the question of con- 
fiumption. All production depends upon consumption. Who are the consumers? 
In the old days when the products of manufacturers were luxuries, the lord and his 
retainers, the lady and her maids were the consumers, a class apart by them- 
selves, but to-day the consumers are the producers. Long ago the laborer con- 
sumed only what would keep him alive. To-day he and his wife and their 
children are so immeasurably the most valuable customers that if the shop 
had to give up the wealthy or those whom it is the custom to call poor, there 
would not be a moment's hesitation or a moment's doubt. 

Unfortunately the gentlemen on the other side have persistently retained the 
-old idea that the producers are one class and the consumers are another, and 
hence we hear on all hands such stupidities of speech as those which sum up the 
workers in each branch and compare them with the whole people. One hun- 
dred and fifty thousand workers in woolens — you ask what are they compared 
with 70,000,000 of consumers; 200,000 workers in steel, what are they com- 
pared with 70,000,000 of consumers; 200,000 workers in cotton, what are they 
compared with 70,000,000 of consumers, and so on all through the long list, for- 
getting that all these people added together make the whole 70,000,000 them- 
selves. 

It so happens that America is filled with workers. There are idle people, 
but they are fewer here than elsewhere except now, when we are living under 
the shadow of the Wilson bill. If those workers are all getting good wages 
they are themselves the market, and if the wages are increasing the market is 
also increasing. The fact that in this country all the workers have been get- 
ting better wages than elsewhere is the very reason why our market is the best 
in the world and why all the nations . of the world are trying to break into it. 
We do not appreciate the nature of our market ourselves. 

I have given you already the glowing testimony of Englishmen who have 
«een us with their own eyes. "Amazing prosperity," "Greatest market in the 
world," "Paradise of the workingman." These are strong words; but let us see 
if cold mathematics do not put to shame the fervor of adjectives. 

A STRIKIMG Ilil^USTRATION. 

We are nominally 70,000,000 people. That is what we are in mere num- 
hevB. But as a market for manufactures and choice foods we are potentially 
175,000,000 as compared with the next best nation on the globe. Nor is this 
difficult to prove. Whenever an Englishman earns one dollar an American 
€ams a dollar and sixty cents. I speak within bounds. Both can get t(he 
food that keeps body and soul together and the shelter which the body must 
have for 60 cents. Take 60 cents from a dollar and you have 40 cents left. 
Take that same 60 cents from the dollar and sixty and you have a dollar left, 
Just two and a half times as much. That surplus can be spent in choice 
foods, in house furnishings, in fine clothes and all the comforts of life — in a 
word, in the products of our manufactures. That makes our population as 
consumers of products, as compared with the English population, 175,000,000. 
Their poulation is 37,000,000 as consumers of products which one century 
ago were pure luxuries, while our population is equivalent to 175,000,000. (Ap- 
plause on the Republican side.) 

If this is our comparison with England what is the comparison with the 
rest of the world, whose markets our committee are so eager to have in ex- 
change for our own. MuUhall gives certain statistics which will serve to 
make the comparison clear. On page 365 of his Dictionary of Statistics he 
#ays the total yearly product of the manufacturers of the world is £4,474,000,000, 
of which the United States produce £1.443,000,000. 



15 

I do not Touch, nor can anybody vouch, for these figures, but the proper-- 
tion of one-third to two-thirds nobody can fairly dispute. We produce one- 
third, and the rest of the world, England included, two-thirds. 

The population of the world is 1,500,000,000, of which we have 70,000,- 
000, which leaves 1,430,000,000 for the rest of mankind. We use all our 
manufactures, or the equivalent of them. Hence we are equal to one-half 
the whole globe outside of ourselves, England included, and compared a^ a 
market with the rest of the world our population is equal to about 700,000,- 
000. (Applause on the Republican side.) 

OUR MARKET EQUAIi TO 700,000,000. 

I repeat, as compared with England herself as a market, our people are- 
equivalent to 175,000,000. As compared with the rest of the world, England 
included, we are equal as a market to 700,000,000. These figures more than 
justify the adjectives of the Englishman, and the cold facts of mathematics 
surpass the spasms of rhetoric. 

Instead of increasing this market by leaving it to the steady increase of 
wages which the figures of the Aldrich report so conclusively show, and 
which have not only received the sanction of the member from New York, the 
Secretary of the Treasury, and the Democratic Bureau of Statistics, but the 
sanction of everybody who hears me, our committee propose to lower wages 
and so lessen the market and then divide that market with somebody else, and 
all on the chance of getting the markets of the world. 

Who have these markets of the world now? There is hardly a spot on the 
globe where three generations of Englishmen, Frenchmen or Germans have not 
been camped in possession of every avenue of trade. Do you suppose that with 
machinery nearly as good as ours and wages at one-half these men are going 
to surrender to us the markets of the world? Why, the very duties you 
keep on show that you do not believe it. If we cannot without duties hold our 
own markets how shall we pay freight, the expense of introducing goods, 
and meet the foreigner where he lives? • 

To add to the interesting impossibilities of this contention, the orators on 
the other side say they are going to maintain wages. How can that be possi- 
ble? Ail things sell at the cost of production. If the difference between cost 
of production here and cost of production in England be not equalized by the 
duty, then our cost of production must go down or we must go out. There- 
fore, our labor, the great component part of cost of production must go down 
also. If you say this will come out of profits then profits will be lessened in 
every occupation, for your own political economists teach you that the profits 
in protected industries can never be greater than in other occupations, and 
will not long consent to be less. Let it be noised abroad that any occupation 
is making big profits and straightway it will be swamped with competitor*^ 
so that over profit is the sure precursor of no profits at all. 

SURVIVAIi ©F TME FITTEST. 

But all these questions of wages are to be met, says the gentleman from 
New York (Mr. Gockran), by our superior civilization, and accuses me of "con- 
fessing that civilization at the highest level is incapable of meeting the competi- 
tion of civilization at its lowest level." (Laughter on the Democratic side.) 

Now, it is a great truth that civilization can successfully meet barbarism, 
but it must do it with brains and not with rhetoric. How often have I heard 
this and similar eloquent outbursts about our superiority, and therefore inevita- 
ble conquest of the inferior. Survival of the superior! That is not the way that 
the great naturalist put it "Survival of the fittest," was his expression; sur-- 



16 

rival of the fittest to survive; not the superior, not the loveliest, not the most 
intellectual, but the one Avho fitted best into the surroundings. Compare th& 
strong bull of Basham with a salt-water smelt. Who doubts the superiority of 
the bull? Yet, if you drop them both into the Atlantic Ocean, I will take my 
chances with the smelt. (Laughter.) A little tomtit, insignificant as a bit of 
dust in the balance, cannot compare with the domestic swan either in grace, 
beauty or power. Yet, if both were dropped from a baloon hung high in air, 
I would rather be the insignificant tomtit than the graceful swan. If I had 
a job to dig on a railway, the competitor for that job whom I should fear 
would not be my friend from New York (Mr. Cockran) (laughter), but some 
child of sunny Italy, so -newly imported that he had not grown up to the wages 
of this adopted country. 

But let us make these illustrations a little broader and take in a bit of his- 
tory. Shortly after I entered Congress one Dennis Kearney began on the sand 
lots to address the world on the Chinese. He said these people were of a 
lower civilization; in fact to use the very expression of the gentleman from^ 
New York (Mr. Cookran), he said it was "civilization at its lowest level." In- 
deed, to be strictly accurate, he used stronger expression. (Laughter.) He de- 
nounced the Chinese, and instead of relying on superior civilization, on the flag 
of freedom in the air above us, the emblem of freedom on the earth beneath 
us, he actually wanted protection by law, and in spite of the jeers and flouts 
of us in the East he has got it at last and with our consent. 

Ub^FXiUEWCE OF CHINESE CMSIAF I.ABOR. 

I know that when the gentleman learns these facts he will be so sorry that he 
was not here to tell these misguided men that having seized the lightnings and 
beat the miracles of Moses without being guilty of his mistakes (laughter), we 
must be able to beat the Chinese without law because of their lower level of 
civilization. What Mr. Kearney would have said to the gentleman from New 
York I do not dare to record. ^ 

Why did the working people of California object to the Chinese? Because 
they knew that if they swarmed here in sufficient numbere the law of wages 
would make our own wages impossible. Had the Chinese had the same wants, 
and been therefore forced to demand the same wages, they could have wor- 
shiped their ancestors here without let or hindrance. It was just because the 
higher civilization could not contend on a free field with the lower that its higher 
civilization had to pwt brains into the scale and protect itself. If then we pro- 
tect ourselves against Chinese labor here, why should we not protect ourselves 
from a lower level of labor as represented by imported goods? Lower- 
priced labor can compete with our labor, whether it take the form of goods 
or of imported Chinamen. 

But says some gentleman, having heard some other gentleman say it, and 
having been struck by its epigrammatic point, but "labor is on the free list." 
Well, that sounds conclusive, does it not? Yet what utter nonsense it really 
is when you come to look at it. Does the Englishman, when he comes here, 
bring his rate of wages with him? I should like to see any immigrant who 
has been here long enough to know his bearings who does not demand as good 
wages as the rest. That is what they come here for. (Applause on the P.epub- 
iican side). 

Only last week the Hungarians and Poles and Slavs in Pennsylvania were 
trying to break up all work in the coal mines because our native citizens, under 
the stress of the Wilson bill, were consenting to take less wages. Obviously 
these gentlemen did not bring their rate of wages with th<>m. Why did we for- 
bid the importation of contract labor? Because the price of it was tainted by 
tke wage scales of a land on a lower level of wages. 



17 



Let me restate this: Men in America demand high and higher wages be- 
cause their surroundings erect what used to be luxuries into necessities. Men 
who come here are soon affected by these same surroundings and are soon un- 
der the same necessities. But Chinamen, because they sequester themselvt^ 
from these surroundings, and bales of goods, because they cannot have the labor 
in them subjected to our influences, ought to be ubder the restriction of law. 
I do not me-m to make the comparison go on all fours and have the goodcs 
prohibited like the Chinese. I only meant to convey" an idea. 

But is it not a dreadful business to tax people? Not necessarily. Taxes 
raised for a good purpose — like a schoolhouse, a road, an army, for payment 
of pensions, for the public debt and indeed for all the purposes of a free people 
— are not only not bad, but very good. Taxes to build a palace for the kingt; 
mistress or to place a barbarian queen on a deserted throne (prolonged laugh- 
ter and cheers on the Republican side) would be dreadful; but we are not 
likely, owing to a series of fortunate accidents, to be called upon to do even 
the last. 

But can you accomplish anything but oppression by taxes? Oh, yes; the 
gentleman from Missouri (Mr. Hatch) will tell you that taxation has regulated 
oleomargarine and can regulate stock sales. At least so he thinks. It has de- 
stroyed wild cat banks. 

On the question of the constitutionality of tariff taxation, I shall spend 
no time. I have not been here as long as I have without learning that "con- 
stitutionality" and "unconstitutionality" on the other side of the Chamber are 
mere phrases, and that when a gentleman of the other side with swelling voice 
denounces the tariff as unconstitutional he merely means that he does not like 
it. (L/aughter and applause.) 

Inasmuch as nobody in a hundred years has even asked the Supreme Court 
to pass on that question, it seems hardly worth while to discuss it. If the 
Father of his Country, fresh from the convention, in signing the first tariff 
tax bill, signed an unconstitutional act the gentleman from Georgia (Mr. Tur- 
ner) and the whole Democratic party are better than George Washington— a 
thing not hitherto charged upon them. (Laughter.) 



WISO FAT§ TME TAX? 

But do not the people pay the tariff taxes, and do they not go into the pock- 
ets of monopolists? Do you believe the consumer pays the tax, or the for- 
eigner? Well. I am going to be perftctly frank about that and answer, some- 
times one and sometimes the other, and sometimes both. The first thing a for- 
eigner does when a tariff tax is laid is to see if he can get into our market with- 
out paying anything. If so, then he will not reduce his prices. If he can- 
not he looks over his margin of profit and sees if he can, by abating some part 
of these profits, get his goods in. So far as he does abate them he pays the tax. 
So far as he does not, the rest of the tax is paid by the consumer. 

If the foreigner pays all the tax, then within the limit where his goods can 
circulate there may be protection or there may not. If after paying the whole 
tax he still has a marrln of profit to sacrifice in the industrial war, there will 
be no protection, or wry limited protection. But if there be only a slight 
margin, which he cannot sacrifice without rendering the market worthless, then 
there will be competition the same as if he manufactured here. In the latter case 
he at least cannot shut up our factories. 

In these cases the prices will not be raised. But where the consumer pays 
any part of the tax, by so much is the price raised. This is the general rule, 



18 

but often it does not work so. After the act of 1890 larg-e importations in an- 
ticipation of large profits, anticipations frustrated by tiie Baring failure panic, 
made great changes in the case. Many prices did not rise at all, and yet manu- 
facturers, knowing that there would be a certainty at least that they could not 
be badly undersold, began work. 

It often happens that men will oegin manufacturing under a tariff that does 
not raise prices because they Know that such a tariff will prevent them from 
going down. 

It is not enough to have goods in the natural market at a price which will 
bring a profit. The manufacturer must know that the industrial enemy cannot 
force the price below the range of profit. Then without any increase he may 
put up a plant. This operation of a tariff which does not raise the price is be- 
cause industrial warfare sometimes assumes this shape. A rival maker may 
sacrifice his goods in order to sacrifice another man's factory, or to prevent the 
establishment of a competitor. If there be a tariff, then, which will not raise prices, 
but which will maintain them, then the native manufacturer's risk in building 
a factory is limited. He may be put to hard struggle, but he cannot be 
beaten out of hand. He will have a fighting chance. 

WHEHE THE FOREIGNER PAYS THE TAX. 

There are, however, so many instances where the foreigner pays the tax 
that there is no wonder that the assertion has been made broadcast. The Ber- 
muda vegetable men appeared before this very committee to urge this very 
fact. Canada, both under the present law and just after the repeal of the 
reciprocity act, is a multitudious witness all along our bordere that the foreign- 
er pays the tax. I venture to say that the lumber tax, lowered by the act of 
1890, has all of it gone out of our Treasury into Canadian pockets. 

It would be an interesting chapter in economic history if we could have in 
figures the abatement of foreign prices which have followed every increase of 
the tariff, for it would show what enormous profits have been made out of us 
by these people when no protection existed. 

Having thus shown th§H; even where tariff taxes are paid by the foreigner 
and the price not raised there may be some protection, let us face the question 
whether, where the price is raised and the consumer pays the whole tax or a part 
of it, there is any benefit to our country thereby. Does not the public suffer for 
the benefit of the few? Not for the benefit of the capitalist, for in the long run 
your own political enonomy will show you that prctected industries will not ob- 
tain any greater remuneration than the unprotected. The same is all they ask 
for and more than they often get. 

But we need not depend upon political economists, for they are always un- 
safe. The gentleman from Massachusetts (Mr. Draper) in his admirable speech 
has demonstrated the facts of equalization of profits. 

In Massachusetts they have statistics so well collected that they mean some- 
thing, and those statistics show that Massachusetts manufacturing stocks pay 
3.87 per cent, Boston bank stocks 4.53 per cent., and in New England Rail- 
road stocks 4.29 per cent. 

Let me put the assertion in another form. If you will give all that cap- 
ital has made on railroads, an unprotected industry, I will give you all that 
capital has made on factories, and agree to feed the hurgry crowds caused by 
the Wilson bill and not claim any virtue for my charity. 

BENEFIT OF I>IVERSIFIEI> . INBUSTRIES. 

The public again do not suffer for the sake of the employes of the protected 
industries, for they get no higher wages than the unprotected. In fact the in- 
crease goes to one as much as the other. Who built the mills at Fall River? 



19 

Who made the machinery? Who furnished the provisions and other consumable 
wealth which Fall River and its mills demand? The answer must be the 
whole United States. "But," says my questioner, "if you only distribute among 
all of us who paid it, this money which was taken from us for the extra price, 
what is the good?" If that were all there was to it I could still answer that 
at least there was no loss. But beyond a question this system establishes 
diversified industries. Nobody can doubt that. Diversified industries call out all 
the working powers of the world. Some men are fitted for one thing, some for 
another. 

The only way to utilize all the powers of body and mind in a nation is to 
have something which suits all. By this means the great army of the unem- 
ployed can be diminished. A nation which keeps ils people employed is in the 
end sure to show the largest gains even ol wealth. Diversified industries edu- 
cate the people and give them a broader education than books can give, and so 
helps them on the road to greater civilization. We have already seen that 
greater civilization leads to higher wages, to greater production. In a country 
of high wages there are greater inducements for inventors, for they can save 
more by their inventions, which are therefore more readily adopted. 

We were talking awhile ago about higher wages. The question naturally 
comes up, how can these higher wages be got? There must be something for 
them to come from. Just think a moment what wages are. They are the de- 
vourers of consumable wealth. In order to have more consumable wealth, you 
must have an incentive for its creation. Wealth will never be made unless a con- 
sumer stands ready. More consumable wp^^^h, therefore, depends upon a broad- 
ening market. This I have already showu r-jus not mean more purchasers, but 
purchasers with better pm*ses, though for that matter in this country we have 
both. 

INVENTIVE GENIUS STIMUIiATEB BY NECESSITY, 

But how can you make more wealth with the same number of workers? 
"By using the forces of nature and by utilizing human brains. How can you do 
that? By incentives. The brain no more works without incentive than the 
body does. 

To hear the discussions in Congress you woul suppose that invention drop- 
ped from Heaven like manna to the Jews. (Laughter). You would suppose 
that James Watt reached out into the darkness and pulled back a steam engine. 
It was not so. All invention is the product of necessities and of pressure. When 
the boy who wanted to go off to play, and so rigged the stopcocks that the en- 
gine went itself, he was not only a true inventor, but he had the same motive — 
his personal advantage — that all inventors have, and like them was urged on by 
business necessities. 

What originated Bessemer steel? Sir Henry Besstmer? No; out the neces- 
sities of railroads, under public pressure for lower rates of trafiic, which would, 
every one of them, been bankrupt without steel rails. If Sir Henry had not 
invented the process somebody else would. It detracts not one iota from the 
fame of Alexander Bell that a dozen men were close on his track. It has 
been so in every great invention. I say, therefore, that it was the diversifica- 
tion of our industries that has stimulated inventions. Otherwise all the inven- 
tive power of America would have run to waste, and when a man calculates the 
wonders of American inventive genius he knows where some of our wealth comes 
from. (Laughter and applause). 

As a further proof that invention is born of necessity, tell me why great 
inventions never come until the world is in such shape as to enjoy them? What 
would the Crusaders have done with railroads? There was not money enough 
vin the world or travel or merchandise to keep them going a week. (Laughter). 



20 

And this brings me to another fact. No invention is worth its salt whicb 
does not have increased consumption behind it. Take the very case of rail- 
roads; are railroads economical? "Certainly," you reply. "They can carry pas- 
sengers for half a cent a mile, for a quarter of a cent, and a New York hack 
will cost you S2, and even a lumbering coach may cost you 10 cents. Of 
course, it is economical." But suppose you had only a stage load to carry 
every day, would it pay to build a railroad and would that conveyance be 
cheap? Hardly. You can make an ax handle with a machine in two seconds;, 
without, in three hours. It would pay to build a machine to make a million 
of ax handles, but not to make one. 

HIGH WAGES CONTRIBUTE TO PROGRESS. 

Therefore I say that the great forces of nature and the wisest inventions- 
are alike unprofitable except for a large consumption. Hence, large consump- 
tion is at the basis of saving in manufacture, and hence high wages contribute 
their share to progress. If you once accept the idea that necessity is mother 
of invention, instead of regarding invention as coming from Heaven knows 
where, you can see how high wages stimulate it. 

I saw at a machine shop not long ago a great machine which could work 
only in one direction, and naturally consumed, in going back to place, as much 
time as in coming forward. It took three men at $3 a day to run it. Half 
their time was lost. Could the speed of the return have been doubled, more 
than $2 a day would have been saved. That invention was made because, being 
applicable to many machines, it meant much money. Had they been worked by 
men who were paid 50 cents a day, it is doubtful if it would have been demand- 
ed. Where wages are low invention is rare. It does not pay. 

It has always seemed to me, until I heard the gentleman from New York the 
other day say to the contrary, that the establishment of new industries and 
not the destruction of old ones was the way to make two jobs hunt one man, 
to use the words I have ordinarily employed in putting it; but he says no,, 
that is wasteful production because you are employing capital in comparatively 
unprofitable occupation. That used long ago to puzzle me, and I used to put 
it this way: Suppose the nation to have a million dollars and no more, pH em- 
ployed at 6 per cent, in that interesting dream of fancy "the most profitable 
employment," and a man should come along and say, "If you people will let me 
put a hundred thousand of this capital, my share, into a less profitable, a 5 
per cent, employment, I will do it on condition that you pay me and all people 
who come here and do the same enough to equalize my profits with the rest of 
you." At first sight that looks like mathematics. 

A PMII.OSOPHIC DEMONSTRATION. 

It would seem incontestable that the nation would lose 1 per cent, on a hun- 
dred thousand dollars, or a thousand dollars every year. Yet I said if free 
traders are correct, this, to a greater or less degree is v/hat the United States 
did even under the Walker tariff. Why is it that we have not gone to pieces 
long ago? Well, one of the fallacies of this demonstration is this: It proceeds 
on the assumption not only that one million is all the capital of the United 
States, but all the capital of the world. 

Suppose that law which taxed the profitable employment coaxed in the §100,- 
000 from the rest of the globe, our nation would have gained $5000 every year, 
instead of losing $1000, for we should have had the whole $1,100,000 earning 6 
per cent, less the tax laid on the whole to raise $1000. But, you say, why 
should not the new $100,000 come in and go into the 6 per cent, most profitable 
employment; why should it select the 5 per cent, employment? Just simply be- 



21 

•ennse that money does not come here by attraction of gravitation, but by the 
mind of a man, and men's minds are what play havoo with cut and dried politi- 
cal economy. 

Suppose you go to a manufacturer of cotton in England and tell him that by 
putting his surplus capital into a Dakota farm he can make 10 per cent. The 
chances are he will not even look at it. Then you try him with a proposal to 
build a cotton factory in Georgia; show him he can make 6 per cent., while 
he is making only 4 at home. The chances are that the cotton mill will tempt 
him and not the farm. He knows the cotton business, but he is not a far- 
mer. 

This, in fact, is the history of the United States. Our laws have invited 
money and men and we have grown great and rich thereby. The gentleman fronj 
Illinois (Mr. Black) has noticed that men come here, and' he doe« not want 
them to come; hence he is willing that our wages shall be lowered to keep peo- 
ple away. Well, this is not the time to discuss immigration; but while people 
are coming I am_ glad they have not yet imbibed the gentleman's ideas and 
have not yet begun to clamor for lower wages. I really cannot help adding 
that when the gentleman from Illinois (Mr. Black) starts his reformed immigra- 
tion of men who come here "unawed by influence and unbribed by gain," I 
hope to be there, for it would be a sight hitherto unknown on earth of men 
who forsook their home without being either pushed or pulled. (Laughter). 

WSIY WE I2AVE FiIlOSFEKEI>. 

To sum it up, if this protection gives us money and men, and our vast 
•country needs both, it may show why we have so wonderfully prospered. If it 
does, I am inclined to think that the way to have two jobs hunting one man 
is to keep on making new mills an.d try and prevent the Committee on Ways 
-and Means from pulling down old ones. 

*'But," says some gentleman fuller of political economy than of sense, "why 
■do you not transfer your capital from these protected industries to the more 
profitable?" Yes, that would be a good idea. We will commence in West Yir- 
yinia and take up the coal mine holes and stick them down somewhere else, un- 
less we can utilize them as places of refuge for the committee after the elec- 
tion. There is what used to be $8,000,000 worth of stuff belonging to the peo- 
ple that make screws. Let us take that up. But it is not worth .$800,000, let 
alone $8,000,000. The bill has dropped $7,200,000— that can not be transferred 
tinywhere. 

But what do you say about the farmer? Well, on that subject I do not 
profess any special learning, but there is one simple statement I wish to make 
and leave the question there. 

If with cities growing up like magic, manufacturing villages' dotting every 
eligible site, each and all swarming with mouths to be filled, the producers of 
food are worse off than when half this country was a desert, I abandon sense in 
favor of political economy. 

One other thing I have noticed in this debate. When the gentleman from 
Kansas (Mr. Simpson) gets a little money ahead he does not put it into the 
stocks in these immensely profitable manufactures. He has too much sense. He 
adds to his farm, and he has told us so. Example is richer than precept. 

If the hope of agriculturists is in English free trade, they had better ponder 
on the fact that while the wages of artisans have increased in England $2.43 
per week since 1850, the wages of agricultural laborers have only increased 72 
cents, and while the Lancashire operatives in the factories live as well as any- 
body except Americaijf?, the agricultural laborers are hardly better off than the 
continental peasantry. England's example will not do for agriculture. 



22 



AW ARGUiWE^iTT SET UP BY FREE TRABERS. 

Here let me meet one other question, and let me meet it fairly. We are 
charged with having claimed that the tariff alone will raise wages, and we are 
pointed triumphantly to the fact that the wages of France and Germany, pro- 
tected by a tariff, are lower than England, free of all tariff, and to America 
with a tariff and still higher wages. We have never made such a claim in any 
such form. Free traders have set up that claim for us in order to triuiuohant- 
ly knock it over. What we do say is that where two nations have equ;il ^kill 
and equal appliances and a market of nearly equal size, and one of them can 
hire labor at one-half less, nothing but a tariff can maintain the higher wages, 
and that we can prove. 

If there be two bales of goods side by side, made by the same kind of 
machinery and with the labor of the human being in both the same degree of 
skill, and if the labor of one bale cost one-half, for example, as much as the 
other, that other bale can never be sold until the extra cost of the costlier labor 
is squeezed out of it, provided there is an abundant supply of the product of 
the cheaper labor. If the bale with the cheaper labor of England in it meets 
the bale with the dearer labor of America in it, which will be bought at the cost 
of production? I leave that problem just there. The sale of the English bale 
will be only limited by England's production. 

Now, as to France and Germany. The gentleman from Ohio (Mr. Harter), 
makes the same blunder which he charges on us. He says the tariff makes low- 
er wages, and asks us to compare the three countries, saying they are all the 
same except the tariff. I do rot read history that way. England had centuries 
of peace or distant war, while both France and Germany were the battlefields of 
Europe. Until Bismarck made Germany a nation she was not even big enough 
to enter successfully modern industrial warfare. To compare either of those 
nations in machinery or wealth to England, a hundred years in advance of them 
both by reason of her history before 1850 and her tributary provinces, is 
absolutely farcical. 

Let. Germany and France get thoroughly established within themselves as 
good machinery as England now has, together with her factory system, and 
nothing but higher wages in those countries or a tariff in their own will ever 
save the English people from ruin. Lord Armstrong knew what he was doing 
when he established an English iron manufactory in Italy with English ap- 
pliances and Italian labor at half price. 

WMAT THE TARIFF CANNOT S>©. 

No, no; tariff does not make the blind see, the lame walk, nor does it 
raise the dead to life, but it is a good, sound, sensible policy for the United States, 
for its growth* in riches and civilization, and if it is stricken down the people 
who in their secret hearts will think us the most shortsighted will be the for- 
eigners who profit by our folly. 

There is still another argument which I desire to present out of the large 
number yet unused. What has made England rich? It is the immense pro- 
fits which come of converting raw material into manufactured goods. She is 
the huge workishop, doing the most profitable work of the world; changiug ma- 
terial to finished product. So long as she can persuade the rest of the world 
to engage in the work which is the least profitable and leave her the most en- 
riching she can well be content. 

Let me give one item, and the figures shall be furnished by the gentleman 
from Alabama (Mr. Wheeler), who told me in your presence that the value of 
all the cotton raised in the United States was only $300,000,000, while the fin- 
ished product of that cotton was $1,750,000,000. When cotton leaves the field it 



23 

IS worth .$300,000,000; when it leaves the mill it is worth six times as much„ 
On our own cotton crop alone we might in time make the prolits on a billion 
and a half of manufactured goods. Nor is there anything to prevent such a re- 
sult in a protective tariff. 

Some men think, indeed, this bill and its author's speeches proceed upon 
the supposition that the first step towards gaining the markets of the world 
is to give up our own, just as if a forfeited army, with enemies on all flanks, 
should overturn its own breast-works as the first preliminary to a march int;> 
the open. Even the foolish chivalry of the Marquis de Montcalm which led 
him to his death on the Heights of Abraham had not that crowning folly. Such 
is not the history of the world; such is not even the example of England. 
Tariff duties, whether levied for that purpose or for revenue, become a dead 
letter when we are able to compete with the outside world. 

We are the only rival that England fears, for we alone have in our borders 
the population and the wages, the raw material, and within ourselves the great 
market which insures to us the most improved machinery. Our constant power 
to increase our wages insures us also continuous progress. If you wish us to 
follow the example of England, I say yes, with all my heart, but her real ex- 
ample and nothing less. Let us keep protection, as she did, until no rival dares 
to invade our territory, and then we may take our chances for a future which 
by that time will not be unknown. (Ajjplause on the Republican side). 

BEST INTEREST OF MANUFACTURERS. 

Nobody knows so well as I do how much even of my own comprehension 
of the great argument which should control this vote I have failed to present. 
I have said not a word of the great fall of prices which has always come from 
the competition of the whole world within itself rendered possible by protection 
and substituted for the competition within a single island. I have said not a 
word of the great difference between the attitude of employers vv^ho find their 
own workmen their best customers in their own land, and who are, therefore, 
moved by their own best interests to give their workmen fair wages, and those 
who sell abroad and are therefore anxious for low wages at home, and on 
whom works unrestrictedly that pernicious doctrine, as wages fall profits rise. 
These and much more have I omitted, for there is a limit to all speaking. 

We know, my friends, that before this tribunal we all of us plead in vain. 
Why we fail to let those answer who read the touching words of Araham Lin- 
coln's first inaugural and remember that he plead in vain with these same men 
and their predecessors. Where he failed we cannot hope to succeed. But 
though we fail here to-day, like our great leader of other days, in the larger 
field before the mightier tribunal which will finally and forever decide this 
question we shall be more than conquerors; for this great nation, shaking off as 
it has once before the influence of a lower civilization, will go on to fulfill its 
high destiny until over the South, as well as over the North, shall be spread 
the full measure of that amazing prosperity which is the wonder of the world. 
(Prolonged applause on the floor and in the gallei-ies). 



Deficiency of Revenue the Cause of 
Financial Difficulty. 



SPEECH 



-OF- 



Hon. John Sherman 

OF OHIO 



IN THE 



Senate of the United States 



Friday, January 3, 1896 



THE GOLD RESERVE 



WASHINGTON, D. C. 

1S96. 



DEFICIENCY OF REVENUE 

THE CAUSE OF 

FINANCIAL DIFFICULTY. 



MR. SHERMAN said: 

The President, in his annual message to Congress, confined himself to 
two important subjects, one our foreign relations and the other the condition 
of our national finances. He followed it by another message on the applica- 
tion of the Monroe doctrine to the controversy between Great Britain and 
Venezuela. 

While Congress has heartily, perhaps too hastily, but with entire unanimity, 
supported him in maintaining the interests and honor of our country in the 
field of diplomacy, it has not apd will not approve his recommendations on 
the more important subject of our financial policy and especially of our cur- 
rency. He has mistaken the cause of our present financial condition in attrib- 
uting it to the demand for gold for United States notes instead of to the 
deficiency of revenue caused by the legislation of the last Congress. He places 
the effect before the cause He proposes as a remedy the conversion of the 
United States notes and the Treasury notes into interest-bearing bonds, thus in- 
creasing the interest-bearing debt nearly $500,000,000. He proposes a line of 
public policy that will produce a sharp contraction of our currency, add greatly 
to the burden of existing debts, and arrest the progress of almost every Amer- 
ican industry which now competes with foreign productions. 

The President is supported in these views by Mr. Carlisle, his able Secre- 
tary of the Treasury, in his report to Congress. It is with diflSdence T under- 
take to controvert their opinions; but my convictions are so strong that they 
are in error that I hope the strength of the facts I will submit to the Senate 
will convince it that the true line of public policy is to supply the Government 
with ample means to meet current expenditures and to pay each year a por- 
tion of the public debt. The gold reserve provided for the redemption of United 
States notes can then be easily maintained without cost except the loss of 
interest on the gold in the Treasury, but with a saving of interest on United 
States notes and Treasury notes of five times the interest lost by the gold held 
in reserve. A vastly greater benefit than saving interest is secured to our 
people by a national paper currency at par with coin supported by the credit 
, of the United States and redeemed on demand in coin at the Treasury in the 
principal city of the United States. 



IXSrFFICIEACY OF REVE^^'UE AFFECTS THE FI> A^TCESl 

The only difficulty in the way of an easy maintenance of our notes at par 
with coin is the fact that during this Administration the revenues of the Gov- 
ernment have not been sufficient to meet the expenditures authorized by Con- 
igcess. If Congress had provided necessary revenue, or if the President and 
3Ir. Carlisle had refused to expend appropriations not mandatory in form, but 
^permissive, so as to confine expenditures within receipts, they would have had 
no difficulty with the reserve. This would have been a stalwart act in harmony 
^with the President's character and plainly within his power. All appropriations 
which are not provided to carry into effect existing law are permissive, but 
Hot mandatory, and his refusal to expend money in excess of the revenues of 
the Government would not only be justified by public policy, but would have 
been heartily approved by the people of the United States. He knew as well 
as any one that since the close of the civil war to the date of his inauguration 
the expenditures of the Government had been less than its receipts. I have 
here a table which shows the receipts and expenditures each year from 1866 
to 1S93. 

Receipts and expenditures of the Government from July 1, 1865, to June 
30. 1895: 



Fiscal Year. 



Total Revenue. 



1866 $558,032,620.06 

1867 490,634,010.27 

1868 405,638,083.32 

1869 370,943,747.21 

1870 411,2.55,477.63 

1871 383,323,944.89 

1872 374.100.867.56 

1873 333,738,204.67 

1874 289,478.755.47 

1875 288,000,051.10 

1876 287,482,039.16 

1877 269,000,.5S0.62 

1878 257,763,878.70 

1879 273,827,184.46 

1880 333,526,610.98 

1881 860,782,292.57 

1882 403,525,2.50.28 

1883 398,287,-581.95 

1884 348,519,869.92 

1885 323,690,706.38 

1886 336,439,727.06 

1887 371,403,277.66 

1888 379,266,074.76 

1889 387,050.058.84 



Total Expendi- 
tures, including 

Premium. 
$520,809,416.99 
357,542,675.16 
377,340,284.86 
322,865,277.80 
309,653,560.75 
292,177,188.25 
277,517,962.67 
290,345,245.33 
287,133,873.17 
274,623,392.84 
258,459,797.33 
238,660,008.93 
236,964,'326.80 
266,947,882.53 
267,642,957.78 
260,712,887..59 
257,981,439.57 
265,408,137.54 
244,126,244.33 
260,226,935.11 
242,483,138.50 
267,932,179.97 
267,924,801.13 
299,288,978.25 



Excess of 

Revenue over 

Expenditures. 

$37,223,203.07 

133,091,335.11 

28,297,798.46 

48,078,469.41 

101,601,916.88 

91,146,756.64 

96,588,904.89 

43.392.959.34 

2.344,882.30 

13.376,658.26 

29,022,241.83 

30,340,577.69 

20,799,551.90 

6,879.300.93 

65,883,653.20 

100,069,404.98 

145,543.810.71 

132.879,444.41 

104.393,625.59 

63,463,771.27 

93,956,588.56 

103,471,097.69 

111.341.273.63 

87,761,080.59 



1S90 403,080,982.63 318,040,710.66 85,040,271.97 

1891 392,612,447.31 365,773,905.35 20,838,541.96 

] 892 • 354,937,784.24 345.023,330.58 9,914,453.66 

1893 385,819,628.78 383,477,054.49 2,341,674.29 

1894 297,722,019.25 367,525,279.83 *69,803,260.58 

1895 313,390,075.11 356,195,298.29 *42,805,223.18 

♦Excess of expenditures over receipts. 

From this official statement it appears that each and every year during 
that long period there was a surplus, which was applied to the reduction of the 
public debt bearing interest. Thie debt amounted August 31, 1865, to $2,381,- 
530,294. On the 1st of March, 1893, it was ^^585, 034,260, thus showing a 
reduction of the interest-bearing debt of $l,796,49f>.0:'l. The public faith was 
pledged to this reduction in our loan laws and by the act creating a sinking 
fund, and, though in some years we did not comply with the terms of the sink- 
ing fund, yet in other years we exceeded its requirements and, prior to this 
Administration, the aggregate reduction of debt was greater than the law re- 
quired. Now, for the first time since 1866, we have deficiencies of revenue. 
Since the 1st of March , 1893, to the 1st of December, 1895, the national debt 
ha3 been inci-eased $162,602,245. 

DEFENSE OF THE McKINEEY ACT. 

The President, in his recent annual message, complains that the law of Oc-' 
tober 6, 1890, known as the McKinley Act, was "inefficient for the purposes 
of revenue." That law, though it largely reduced taxation by placing many 
articles on the free list and granted a bounty for the production of sugar, yet 
did not reduce revenues below expenditures, but provided a surplus of $37,239,- 
762.57 June 30, 1891, and $9,914,453.66 June 30, 1892, and $2,341,674.29 on 
the 30th of June, 1893, when Mr. Cleveland was President and a Democratic 
majority in both Houses of Congress had been elected, all pledged to repeal 
the McKinley Act and to reduce duties. That the McKinley Act did not 
produce more revenue in 1893 and 1894 is not a matter of surprise. Any 
tariff law denounced by the party in power, with a promise to repeal it and to 
reduce duties, would prevent importations under the old law and thus lower the 
revenue. Early in December, 1893, at the first regular session of Congress during 
Mr. Cleveland's term, a bill was formulated and, as soon -as practicable, passed 
the House of Representatives. 

That bill met the hearty approval of the President. If it had become a law 
as originally presented the deficiency in revenue would have been much greater 
than now; but conservative Democratic Senators, with the aid of Republican 
Senators, greatly improved the House bill, added other duties and changed the 
scope of the measure. With these amendments it became a law. The Presi- 
dent refused to sign it, expressing his opposition to the Senate amendments, and 
yet now supports it when deficiencies have been greatly increased, when the pub- 
lic debt is increasing, and doubts are expressed as to the ability of the Govern- 
ment to maintain its notes at par with coin. The President makes no men- 
tion in his message of these deficiencies; no mention of the issue of interest-bear- 



ing bonds to meet them. The Secretary of the Treasury is more frank in his 
statement. He reports a deficiency of $69,803,260.58 during the fiscal year ended 
June 30, 1894, and for the year ended June 30, 1895, $42,805,223.18, and for the six 
months prior to December 1, 1895, $17,613,539.24; in all, $130,221,023. 

MCKINI.EY AND WIL.SON I.AWS COMPARED. 

No complaint was made that the McKinley law "was inefficient for the pur- 
pose of revenue" when the Wilson bill was pending. The objection to the 
McKinley law was that it was a "protectiye tariff," and the Wilson bill was a 
"reyenue tariff." I have a statement showing the receipts and expenditures un- 
der each law each month, the McKinley law from its passage to the election of 
Cleveland, and the Wilson law from its passage to December 1, 1895. During 
the twenty-five months of the McKinley law the average monthly surplus was 
$1,129,821. During the existence of the Wilson law the average monthly de- 
ficiency was $4,699,603. If the McKinley law was, in the opinion of the Presi- 
dent, inefficient for revenue, he should have said of the Wilson law that it was 
bounteous in deficiencies. 

Receipts and expenditures under McKinley law up to election of Fifty-third 
Congress and President Cleveland (October 1, 1890, to November 1, 1892), 
twenty-five months. 

Months. Receipts. Expenditures. 

1890-October $39,222,174 $35,690,720 

November ." 28,678,674 40,460,337 

December 31,106,164 18,043,047 

1891-January , ... 36,810,233 21,470,967 

February 29,273,173 29,445,669 

March 29,027,455 29,062,737 

April 25,465,231 23,791,107 

May ... 27,289,305 27,690,326 

.June ... 31,631,849 33,628,103 

July 34,158,244 38,100,294 

August 28,773,281 19,537,484 

September 27,165,554 22,267,037 

October 28,448,562 30,650,810 

November 26,802,887 26,156.047 

December 27,646,515 30,424,724 

1892— January 30,383,478 34,175,350 

February 30,698,944 25,952,725 

March 29,836,606 27,784,217 

April 26,971,224 30,059,631 

May 28,228,398 31,732,793 

.Tune 30,958,617 27,922,412 

.July 34.314,331 36,333,976 

August 33,479,058 31,440,254 



September 31,797,628 28,192,423 

October 31,288,540 31^87,962 

Total ?759,456,825 $731,211,184 

Surplus, $28,245,641. 

Average monthly surplus, $1,129,821. 

Receipts and expenditures under Wilson law up to meeting of Fifty-fourth 
Congress (September 1, 1894 to December 1, 1895), fifteen months. 

Months. Receipts. Expenditures. 

1894-September $22,621,228 $30,323,018 

October 19,139,240 82,713,039 

November 19,411,403 28,477,188 

December ; 21,866,136 27,136,460 

1895— January 27,804,399 34,523,447 

February 22,888,057 25,636,035 

March 25,470,475 25,716,957 

April 24,247,836 32,990,676 

May 25,272,078 27,918,982 

June 25,615,474 21,683,029 

July 29,069,697 38,548,063 

August 28,962,696 32,588,184 

September 27,549,678 24,320,481 

October 27,901,748 34,503,425 

November 25,986,503 27,112,708 

Total .$373,796,648 $444,290,692 

Deficiency, $70,494,044. 

Average monthly deficiency, $4,699,603. 

I beg the attention of Senators to the statistics I have presented. They are 
authentic and official. During the first year of the Wilson law the agricultural 
imports, all of which are such as are produced in the United States, the most 
common products of our farms, were of the value of $107,342,522. During the 
last year of the McKinley law the imports of the same farm products were 
of the value of $51,414,844. So under the Wilson law the imports of agricultur- 
al products, which we produce in the greatest abundance, were doubled in 
amount as compared with the amount imported under the McKinley law. 

IMPORTATIONS UNDER THE ITIIiSON EAW PA\ ARIiE IX 

GOLD. 

Notably, during the same time, the importation of two articles (that we 
can produce in the United States) under the Wilson law were wool, valued at 
$32,589,791, and hides, $24,623,239. Under the McKinley law wool valued at 
$6,299,934 and hides valued at $10,480,562 were imported. Importations of wool 
were increased under the Wilson law sixfold. It is no wonder that our sheep 
are being destroyed. The importation of hides under the present act increased 
two and one-half fold. T^e American farmer was thus deprived of his home 
market. 



Other importations made during a year under the Wilson law of articles 
which we can readily produce in this country were valued at §263,684,513, while 
under the McKinley law the value of the same articles imported was $172,- 
743,601. 

The enormous importations under the Wilson law, for which we had to pay 
gold, necessarily diminished the exports of the United States. Our chief re- 
liance in our foreign trade is to export our products, mainly agricultural, in 
sufficient quantity or more to pay for our imports, so that the balance of trade 
shall be in our favor. Under the Wilson law we exported in a year agricultural 
productions valued at $301,578,885, while during the last year of the McKin- 
ley law we exported similar productions valued at $371,125,299. 
Statement showing the imports and exports of leading farm products during the 
first year of Wilson tariff compared with last year of McKinley tariff 
(Compiled from official publications of Treasury). 

AORICIILTURAI. IMPORTS. 

Last year of 

Articles. McKinley First year of 

law. Wilson law. 

Animals $986,359 $2,121,524 

Breadstuffs 2,297,027 2,895,297 

Eggs 161,328 341,284 

Flax 1,101,347 2,545,610 

Feathers 910,981 3,077,955 

Fruits 4,659,364 5,333,499 

Hay 846,739 1,658.331 

Hemp 266,352 632,468 

Hides 10,480,562 24,623,269 

Hops. 582,875 601,185 

Provisions 1,824,709 2,037,535 

Rice 2,566,089 3,497,166 

Seeds 2,361,813 7,146,504 

Tobacco 13,005,715 14,389,381 

Vegetables 3,083,400 3,858,770 

Wool 6,299,934 32,589,791 

Total 51,414,844 107,342,522 

AGRICUI.TURAI. EXPORTS. 

Hay $924,916 $800,000 

Hops 3,752,213 1,849,898 

Vegetables 2,072,974 1,775,551 

Oil cake and nieal 9,442,045 3,070,032 

Seeds 8,038,558 2,972,242 

Corn 31,207,331 19,032,404 

Wheat 67,793,499 52,339,232 

Flour 78,062,212 59,226,244 

Provisions 169,831,131 155,493,282 

Total 371,12.5,299 301,578,.S85 



Statement showing imports of manufactures during first year of Wilson law 
compared with last year of McKinley law. 

Last year of 

Articles. McKinley First year of 

law. Wilson law. 

Glass and glassware $5,004,469 $7,066,125 

Earthenware 6,302,686 9,793,131 

Leather and manufactures 9,206,212 15,213,076 

Wood and manufactures . . 16,870,581 19,070,141 

Woolen manufactures 15,838,204 51,747,902 

Textile grasses, manufactured 18,737,663 26,399,108 

Silk and manufactures 22,741,982 30,911,884 

Ck)tton manufactures 21,310,629 34,781,538 

Iron manufactures 19,005,999 24,030,799 

Chemicals 37,725,176 44,645,815 

Total 172,743,601 263,684,513 

It will thus will seen that under the McKinley law we exported more 
and under the other act less, the difference amounting to about $70,000,000. 
Therefore, the balance of trade necessarily turned against us. The deficiency 
of revenue was the primary cause of the demand for gold for United States 
notes. The gold hoarded for resumption purposes was not separated from the 
money received for current revenue, and this revenue being insufiicient to meet 
expenses, the gold accumulated for redemption purposes was drawn upon to 
make good deficiencies. 

PRESIREXT CliEVEEAXD'S BOND ISSUES. 

It is strange that the President in dealing with our financial condition should 
ignore entirely the pregnant and controlling fact that during his term of office 
thus far three issues of bonds have been made, amounting in the aggregate to 
$162,315,400, to meet current expenses in time of profound peace. He attributes 
all our financial difficulties to the continued circulation of United States notes 
and Treasury notes, debts bearing no interest, amounting to nearly $500,000,- 
000. His statement of the origin and history of the United States notes is 
strongly tinged with prejudice, for though these notes were irredeemable for a 
time, they were convertible into bonds bearing interest payable in coin. They re- 
placed notes issued by banks chartered by the several States. 

They were the best possible substitute for coin, and, in connection with 
the bonds of the United States, they furnished the means by which alone the 
Army and Navy could have been sustained during the war. After the war waa 
over the question of the retirement of United States notes was mooted, but no 
party or section of our country demanded a cancellation of these notes, but dif- 
fered as to the amount to be retained in circulation. Tlie Democratic party 
then demanded the largest amount named, while a new party called the "Green- 
back party," demanded an unlimited issue without any provision for their re- 
demption in coin. The Republican party provided, by the resumption act of 
1875. for the reduction of United States notes to the maximum of $300,000.- 



10 

000, and their redemption in coin on and after the let day of January, 1879. 
This reduction was arrested by Congress when the amount of United States 
notes had been reduced to $346,681,016, when both Houses of Congress had 
Democratic majorities. Provision was made for the redemption of the United 
States notes by coin on demand and for their reissue, and authority was given 
to sell United States bonds for that purpose. 

From the 1st day of January, 1879, to the election of Mr. Cleveland in 
November, 1892, there was no disturbance of the orderly receipt and exchange 
of gold and currency. The gold deposited in the Treasury in exchange for 
bonds in the summer and fall of 1878 amounted to $95,500,000. The ordi- 
nary current revenue in the Treasury conducted the vast operations of the 
Government without friction or trouble for nearly 14 years. United States 
notes were at par with coin not only in every part of the United States, but 
in every country in the world. During all that long period United States 
notes were presented for redemption, but in amounts comparatively insignifi- 
cant. 

REDEMPTION IX GOED EAKGEEY INCREASED UNDER 
THE DEMOCRATIC ADMINISTRATION. 

I have here a table, prepared by the Treasury Department, by which it 
appears that during 13 years, from the 1st of of July, 1879, to the 1st of July, 
1892, the redemption of United States notes in gold averaged less than $3,000,- 
000 a year, while during the last three and one-half years the redemption of 
United States notes and Treasury notes, exceeded $100,000,000 for each year. 
During the first 13 years gold was exported in large quantities, but it was not 
drawn from the reserve; but during the past three and a half years $360,000,- 
000 was drawn from the reserve, and $305,000,000 exported. The balance, with 
the dome€tic supply of gold, was hoarded in the United States. I here insert 
a table showing the redemption of notes each year and the exjwrts of gold. 

Redemption in gold of United Statps notes and Treasury notes of 1890, and 
exports of gold from January 1, 1879, to December 1, 1895. 

United States Treasury 
Fiscal year. Notes. Notes of 1890. 

1879 (6 months) $7,976,698 

1880 3,780,638 

1881 271,750 

1882 40,000 

1883 75,000 

1884 590,000 

1885 2,222,000 

1886 6,863,699 

1887 . 4,224,073 

1888 692,596 

1889 730,143 

1890 732.380 





Exports 


Total. 


of Gold. 


$7,976,698 


$4,587,614 


3,780,638 


3,639,025 


271,750 


2,565,132 


40,000 


32,587,880 


75,000 


11,600,888 


590,000 


41,081,957 


2,222,000 


8,477,892 


6,863,699 


42,952,191 


4,224,073 


9,701,187 


692,596 


18,376,234 


730,143 


59,952,285 


732,386 


17,274,491 



11 

1S91 5,986,070 5,986,070 86,362,654 

1892 5,352,243 $3,773,600 9,125,843 50,195,327 

1893 55,319,125 46,781,220 102,100,345 108,680,844 

1894 68,242,408 16,599,742 84,842,150 76,978,061 

1895 109,783,800 7,570,398 117,354,198 66,131,183 

1896 (5 months) 53,926,457 2,043,362 55,969,819 53,899,201 

Total $326,809,086 $76,768,322 $4^3,577,408 $695,044,046 

The recent report of Secretary Carlisle shows that prior to 1891 the de- 
mand for coin for United States notes during a period of 13 years, from July 
1. 1879, to July 1, 1892, was only $43,310,896, while the receipts of gold for 
United States notes during the same period amounted to $160,000,000. Gold 
was deposited and any kind of paper money was demanded. The withdrawals from 
the Treasury from July 1, 1892, to December 1, 1895, have amounted to $360,- 
266,512. 

I will read what he says in his report: 

The withdrawals from the Treasury between July 1, 1879, and July 1, 1S92, 
amounted to ?43, 310,896, while the gross exports during the same time amounted 
to $389,354,757, showing that $346,043,861 was supplied from sources outside of the 
Treasury— ) 

He is speaking of gold — 
but the withdrawals from July 1, 1892, to December 1, 1895, have amounted to 
$360,266,512 and the gross exports have amounted to $305,617,419, from which it 
appears that the Government has furnished a sum equal to the whole export and 
$54,649,098 in addition. While the Government has thus been compelled during the 
last three and a half years not only to furnish gold from the Treasury for export 
to other countries, but also a large amount for the use of our people at home, its 
receipts of gold on account of customs and other taxes have been constantly dimin- 
ishing since July 12, 1890, and have now entirely ceased. 

FliUCTUATIOM OF GOI.D IN THE TREASURY. 

I have a graphic map attached to the Secretary's report of 1894, which shows 
the amount of gold in the Treasury from 1879 to July 1, 1894. It steadily 
and almost continuously increased from $140,000,000 on the 1st of January, 
1879, to $300,000,000 on the 1st of January, 1891. It then steadily decreased 
to the 1st of July, 1894, when it was reduced to $125,000,000, and, though re- 
plenished by the large sale of bonds, it was reduced December 31, 1895, to 
the sum of $64,204,651. 

During the first term of Mr. Cleveland, when he was powerless to affect 
our currency and tariff policy, the Senate being Republican, the gold increased 
from $240,000,000 on the 1st of April, 1885, to $320,000,000 on the 1st of April. 
1889. This gold came into the Treasury without cost in exchange for United 
States notes or gold certificates. 

It is just to Mr. Carlisle to say that he attributes the withdrawal of gold to 
silver legislation, yet the Bland-Allison act was in force from 1878 to 1890, 
when the accumulation of gold occurred, and the great body . of gold was with- 
drawn after the act of July 14, 1890, was repealed. In 1880, while I was Sec- 



12 

retarv of the Treasury, the GoTernment received over §60.000,000 of gold 
in exchange for silver certificates and United States notes; and yet this was 
done after the Bland-Allison Act was in force, and the silver certificates had 
been issued under that act. United States notes and silver certificates were 
more convenient to purchase cotton and corn, and when maintained at parity 
with coin will always be preferred in large commercial transactions as well as 
in the current business of life. 



ISSIE OF B03iI>IS TO RETIRE TREASURY NOTES. 

The President demands the retirement and cancellation of all the United 
States notes and Treasury notes by the sale of bonds of the United States bear- 
ing interest. In his annual message he says: 

In anticipation of impending trouble, I had, on the 2Sth day of January, 1895, 
addressed a communication to the Congress fully setting forth our difficulties and 
dangerous position, and earnestly recommending that authority be given the Sec- 
retary of the Treasury to issue bonds bearing a low rate of interest, payable by 
their terms in gold, for the purpose of maintaining a sufficient gold reserve, and— 

Here is the important part — 

also for the redemption and cancellation of outstanding United States notes and the 
Treasury notes, issued for the purchase of silver under the law of 1890. This recom- 
mendation did not, however, meet with legislative approval. 

He might have said that it was rejected by both Houses of Congress, each 
containing a majority of his political friends. With the experience of fourteen 
yer rs. the people of the United States, as well as their representatives, were 
almost unanimously in favor of a currency so easily maintained at par in coiD 
by the promise of the United States to pay it in coin and by holding in the Treas- 
ury $100,000,000 gold coin for its redenr.ption when presented. No one con- 
templated that this reserve would be used to pay current expenditures. In all 
our legislation since the war ample means were provided to meet current ex- 
penditures without trenching upon this reserve, and it was not encroached up- 
on until Mr. Cleveland became President. Instead of demanding more revenue, 
he urged the reduction of duties and sect red the passage of a law which re- 
duced the revenue and forced the Treasury to encroach upon the redemption 
fund to meet current obligations. If this policy is adopted to compel the iieople 
pf the United States to surrender the best paper currency they have ever en- 
jo;, ed, it will fail. If revenue is wanted to meet current expenditures, it will 
be furnished, either by taxation or by borrowing, or by both; but to create de- 
ficiencies in order to compel the cancellation of United States notes by the 
issue of bonds, will not, in the language of the President, "meet with legisla- 
tive approval." 

Mr. Cleveland in his message complains that when notes are presented 
for redemption and are redeemed the law requires that they— 
shall belong to the United States, they shall not be retired, canceled, or destroyed, 
■ but they shall be reissued and paid out again and kept in circulation. 



13 



THE RI€JHT TO RE-ISSUE A CIRCUL.ATIIVG NOTE. 

The right to reissue is a necessary incident to a circulating note. The United 
States does what every bank does. By this provision it furnishes a note for cir- 
culation better than any other yet devised by mortal man. 

He also says: 

The Government was put in the anomalous situation of owing to ttie holders 
of its notes debts payable in gold on demand which could neither be retired by 
receiving such notes in discharge of obligations due the Government, nor canceled 
by actual payment in gold. It was forced to redeem without redemption and to 
pay without acquittance. 

It seems to me that when the Government redeems its note the former holder 
of the note has no right to say whether it shall be reissued or not. The last 
sentence is without meaning. If the United States redeems its note the holder 
has nothing more to say, and when the United States pays out a note it always 
takes a receipt, which is an acquittance. 

The President says that — 
in April, 1893, for the first time since its establishment, this reserve amounted to less 
than $100,000,000, containing at that date only $97,011,330. 

This significant statement made as to the earliest days of his Administration 
should have excited in the mind of the President an inquiry into the cause of 
the reduction of the reserve. The real reserve for redemption purposes was 
the proceeds of $95,500,000 bonds and no more. In addition to this reserve it 
is necessary to have on hand to mee.t current expenditures the sum of from 
twenty to forty million dollars. At certain periods a large balance is accumu- 
lated to pay the interest of the public debt and other large disbursements for 
the Army and Navy. Any excess should be at once applied to the reduction of 
the principal of the public debt. This line of public policy was continued from 
the 1st of January, 1879, to the 4th of March, 1893, including the first Admin- 
istration of Mr. Cleveland. During this period many times more gold was de- 
posited in the Treasury than was paid out. Large amounts of gold were 
deposited in the Treasury for gold certificates. The public debt was largely 
diminished. Not a shadow of doubt had been cast upon the ability of the Gov- 
renment to redeem its notes or to maintain its reserves. The minimum never 
fell below $100,000,000. 

WHAT SHOUIiD BE I>ONE WITH REDEEMED NOTES. 

It is but fair to state, that the resumption act of 1875 did not segregate 
the resumption fund from the general balance, nor did it provide that notes re- 
deemed should be held in place of the coin paid out. The then Secretary of 
the Treasury, in his annual report to Congress, on the 6th of December, ISSO. 
pointed out these defects in the resumption law. He said: 

The Secretary expresses the utmost confidence that without new legislation the 
entire amount of United States notes now authorized and outstanding can be easily 
maintained at par in coin, even if the present favorable financial condition should 
change; but in order to accomplish this the coin reserve must be kept unimpaired, 
except by such payments as may be made from it in redemption of notes. Notes 
redeemed should be temporarily held, in place of coin paid out. especially if it ap- 



14 

pears that the call for coin is greater in amount than the coin coming in due 
course into the Treasury or the mints. 

It is suggested that Congress might define and set apart the coin reserre as 
a special fund for resumption purposes. The general available balance Is now 
treated as such a fund; but as this balance may, at the discretion of the Sec- 
retary of the Treasury, be unduly drawn upon for the purchase or payment of 
bonds, it would appear advisable that Congress prescribe the maximum and min- 
imum of the fund. 

This advice, given in 1880, was not needed, at least until the present Ad- 
ministration came into power, and now it is very sorely needed by them. 
Congress neglected to enact into law the measures proposed, but neither the 
Congress nor the Secretary of the Treasury anticipated that the time would 
come when this fund would be applied to pay the current deficiencies in the 
revenue amounting in two and a half years to $162,000,000. Both the Presi- 
dent and the Secretary say that no provision had been made by law for the 
happening of such deficiencies and that their only resort was the general fund 
in the Treasury, composed of the resumption fund and the general balance in 
the Treasury. But it is due to truth to say that in February, 1893, a short 
time before the close of the Fifty-second Congress, when Mr. Carlisle was a 
member of the Committee on Finance of the Senate and it was known that 
he was to be Secretary of the Treasury, and when the probabilities of a de- 
ficiency became apparent, that committee, upon my motion, with the approba- 
tion of Mr. Carlisle, reported an amendment to an appropriation bill as follows: 

To enable the Secretary of the Treasury to provide for and to maintain the 
redemption of United States notes according to the provisions of the act ap- 
proved January 14, 1875, entitled "An act to provide for the resumption of 
specie payments," $50,000; and, at the discretion of the Secretary, he is au- 
thorized to issue, sell and dispose of, at not less than par in coin, either of 
the description o' bonds authorized in said act, or bonds of the United States 
bearing not to exceed 3 per cent, interest, payable semi-annually and redeem- 
able at the pleasure of the United States after five years from their date with 
like qualities, privileges and exemptions provided in said act for the bonds there- 
in authorized, to the extent necessary to carry said resumption act into full 
effect, and to use the proceeds thereof for the purposes provided in said act and 
none other. 

REDUCTIOX OF REVENUES BY THE FIFTY-THIRD 

CONGRESS. 

This amendment is practically and substantially the bill now pending in the 
Senate. The amendment was adopted by the Senate. It went to the House of 
Representatives and was there referred, without a vote, to a committee of 
conference, which rejected it, and, as it was understood at the time, with the 
approval of Mr. Carlisle, who said it was unnecessary. No deficiency at that 
time existed, but it was manifest that the policy of the incoming Adniinistra- 
tioD would create a deficiency. If that amendment had became a law the Sec- 
retary could easily have maintained the reserve and met deficiencies as {hey 
occurred by the proceeds of the bonds described in it. 

Nor would deficiencies have occurred had not the President and both 
Houses of the Fifty-third Congress, then in political sympathy, united in pass- 



15 

ing a law reducing the revenue below expenditures for the first time since the 
close of the war, and compelled the executive authorities to apply a fund crea- 
ted for the redemption of United States notes to meet the ordinary expenses 
of the Government. This demonstrated fact is the source and fountain of all 
our present financial difficulties. 

Congress neglected to cure the defects pointed out by me as Secretary of 
the Treasury in December, 1880, but I hope will correct them now at the re- 
quest of the President. It was not then anticipated that a deficiency of rev- 
enue would occur or that if it did occur the Government would use a fund 
specifically pledged for another purpose to meet current liabilities. Notes once 
redeemed should only be reissued for gold coin, and such reissues should be 
mandatory when coin is deposited in the Treasury. With this provision of law 
the scarcity of currency would create such a demand for it that coin would 
be freely deposited in exchange for the more profitable and current notes of 
the United States. 

THE REDEMPTION FUND SHOUED BE SEGREGATED. 

The resumption fund should be segregated from all other moneys of the United 
States and paid out only in redemption of United States notes. With such 
provision in the law the resumption fund could not be invaded to meet deficien- 
cies in the revenue. They should be provided for by bonds or certificates of 
indebtedness of small denominations at a low rate of interest, which would be 
readily taken by the people through national banks, subtreasuries, and post 
offices. 

There seems to be a misapprehension of the difficulties of maintaining the 
redemption of United States notes. The nominal volume of these is $346,- 
681,016. This is the reduced volume from the maximum outstanding during 
the civil war of $450,000,000. But this sum of $346,000,000 includes all the 
notes lost and destroyed by casualty since the first issue in 1862. The amount 
thus lost has been estimated from $20,000,000 to $40,000,000, reducing the 
notes outstanding to $320,000,000, or less. The national banks in certain large 
cities are required to keep on hand in lawful money of the United States an 
amount equal to at least 25 per cent, of the aggregate amount of their notes 
in circulation and their deposits, and all other banking associations are required 
at all times to have on hand in lawful money of the United States an amount 
equal to at least 15 per cent, of the aggregate amount of their notes in circula- 
tion and of their deposits. Under this law the national banks now hold for 
the redemption of their notes and tbe security of their deposits the sum of over 
$93,000,000 in lawful money almost exclusively in United States notes, and 
this money cannot be withdrawn by any bank without reducing their notes in 
circulation and their deposits from four to six fold the amount of their with- 
drawal. The actual amount of United States notes now in circulation among the 
people cannot exceed $227,000,000, and this is scattered among 65,000,000 
people who cherish this money with confidence and faith as the best money 
they have ever had. With a provision in the law that notes redeemed with coin 
shall not be reissued except for coin the value and stability of our currency 
can never be endangere'l. 



16 

As the term "lawful money" includes gold coin there is a disposition hy 
timid banks to convert their United States notes into coin, thus aiding in de- 
pleting the redemption reserve. This has been done to the extent of forty to 
fifty million dollars. This ought to be prevented by a provision of law that the 
bank reserve of lawful money shall be United States notes or Treasury notes 
only. The banks can redeem their notes with Treasury notes and United States 
notes, because the law expressly makes those notes a legal-tender for that pur- 
pose. It is a bad sign when the banks seek to embarrass the Government in 
order to convert their greenbacks into gold, and I trust it will be discontinued. 
It has not gone further than the amount I have mentioned, which is about 
$40,000,000. 

THE COMMENCEMENT OF THE "CONTINUOUS CIRCUIT." 

The President complains that the notes are presented and paid, reissued, 
and paid again and again, making a continuous circuit. When did this circuit 
commence? The only answer is, when this Administration, supported by the last 
Congress, created a deficiency. Why does the circuit continue? It is because 
the deficiency continues. The Government resorts to the financial policy of 
Micawber. It gives its bonds and thinks the debt paid. But the circuit con- 
tinues. The money received for current revenue is paid to cover deficiencies 
and is returned for gold, and then more bonds. The Secretary hopes that in 
two or three years there will be no deficiency. What is the ground for this 
hope? It is that a new Administration will provide more revenue, and then the 
circuit will be broken. Why not apply the remedy now? 

If deficiencies occur Congress should immediately supply the means to meet 
them, and Congress, and not the Administration, must be the judge of the 
mode and manner of relief. The invasion and misapplication of the resump- 
tion fund is of infinitely greater injury to our people than the imposition of 
ten times the amount of taxation. 

It is said that the law for their continned reissue is mandatory. That is 
inot a fair construction of the law. The plain meaning of it is that the redemp- 
tion of the notes shall not cause their cancellation. They are placed on the 
footing of bank notes. What solvent bank would reissue its notes when there 
was a run upon it? It would hold them until the demand ceased. The Govern- 
ment ought to exercise the same prudence. The President is of the opinion 
that the United States notes and Treasury notes should be retired and give 
place to bank notes. This is a question for Congress to decide. It is certainly 
not of that opinion now, nor was the last Congress of that opinion. Outside 
of a few large cities where banking facilities are abundant and business is 
conducted by checks and commercial paper, there is no desire for the retirement 
of national paper money. It is not right for the executive authorities to dis- 
credit this money by using it for current deficiencies. It was the use and dis- 
persion of the redemption fund that created the circle of which he complains. 

I believe that under existing law the aggregate sum of United States notes 
and Treasury notes issued under the act of 1890, amounting to about $460,000,- 
OOO, can be easily maintained at par with coin if the two amendments I have 
mentioned are adopted by Congress. .-* . 



Blaii's Bgpig to fiMslone. 



FREE ™DE m PROTECTION? 



:pR.03sd: 



kmb n M\w id Mm] 



BY 



HON. JAMES S. SHERMAN 

OF NEW YORK, 

In the House of Representatives, 

WASHINGTON, D. C, 
^une 8, 1896. ' 



BLAINE'S REPLY TO GLADSTONE. 



FREE TRADE OR PROTECTION? 



Mr. Speaker. As supplemental to my remarks I add as an appendix 
the article on "Free Trade or Protection?" being tlie reply of tlie 
Hon James G. Blaine to the Hon William E. Gladstone, and published 
in the North American Reviev*^ for January, 1890, the copyright of 
which is in the North American Review and has been very kindly 
l^ranted me for this purpose by Mr. Lloyd Brice, of the North Amer- 
ican Review. Mr. Blaine was for many years possibly our foremost, 
certainly one of our greatest, citizens. He has now^ gone from us, but 
his words, his counsels, his opinions will bear weight— a greater 
weight with each succeeding generation of his fellows-citizens w^ho rec- 
ognize in him a typical, intense and far-sighted American. 



FREE TRADE OR PROTECTION ?— BLAINE'S REPLY TO GLAD- 
STONE. 

(Reprinted by special permission from the North American Review, copy- 
righted, 1889, By Lloyd Brice.) 

There can be no doubt that Mr. Gladstone is the most distinguished repre- 
sentative of the free-trade school of political economists. His addresses in 
Parliament on his celebrated budget, when chancellor of the exchequer, in 
1853, were declared by Lord John Russell "to contain the ablest exposition 
of the true principles of finance ever delivered by an English statesman." 
His illustrious character, his great ability and his financial experience point 
to him as the leading defender of free trade applied to the industrial system 
of Great Britain. 

Mr. Gladstone apologizes for his apparent interference with our affairs. 
He may be assured that apology is superfluous. Americans of all classes 
hold him in honor; free traders will rejoice in so eminent an advocate, and 
protectionists, always the representatives of liberality and progress, will be 
glad to learn his opinions upon a question of such transcendent importance 
to the past, the present and the future of the Republic, 

Perhaps the most remarkable feature in the argument of Mr. Gladstone, 
as indeed of every English free trader except John Stuart Mill, is the 
Tiniversality of application which he demands for his theory. In urging it^ 



adoption lie makes no distinction between countries; he takes no account of 
geofraphical position — whether a nation be in the Eastern or the Western 
hemisphere, whether it be north or south of the Equator; he pays no heed to 
climate or product or degree of advancement; none to topography— whether 
the country be as level aa the delta of the Nile or as mountainous as the Re- 
public of Bolivia; none to pursuits and employments, whether in the agricul- 
tural, manufacturing,, or commercial field; none to the wealth or poverty of 
a people; none to population, whether it be crowded or sparse; none to area, 
whether it be as limited as a German principality or as extended as a conti- 
nental empire. Free trade he believes advantageous for England; therefore, 
without the allowance of any modifying condition, great or small, the Eng- 
lish economist declares it to be advantageous for the United States, for Bra- 
zil, for Australia; in short, for all countries with which England can establish 
trade relations. It would be difficult, if not impossible, for Mr. Gladstone 
to find eny principle of administration or any measure of finance so exactly 
fitted to the varying needs of all countries as he assumes the policy of free 
trade to be. Surely it is not unfair to maintain that, deducing his results 
frpm observation and experience in his own country, he may fall into error 
and fail to appreciate the financial workings of other countries geographically 
remote and of vastly greater area. 

AMEEICAN PROTECTIONIST VS. ENGLISH FREE TRADER. 

The American protectionist, let it not be discourteous to urge, is broader 
in hia views than the English free trader. No intelligent protectionist in the 
United States pretends that every country would alike realize advantage 
from the adoption of the protective system. Human government is not a 
machine, and even machines can not be so perfectly adjusted as to work with 
equal effectiveness at all times and under all conditions. Great Britain and 
the United States certainly resemble one another in more ways than either 
can be said to resemble any other nation in the world; yet when we com- 
pare the two on the question at issue the differences are so marked that we 
almost lose sight of the resemblance. One is an insular monarchy with class 
government; the other a continental Republic with popular government. One 
has a large population to the square mile; the other has a small population to 
the square mile. One was old in a rich and complex civilization before the 
establishment of the other was even foreseen. One had become the wealthiest 
nation of the world while the other was yet in the toils and doubts of a fron- 
tier life and a primitive civilization. One had extensive manufactures for 
almost every field of human need, with the civilized world for its market, 
while the population of the other was still forced to divide its energies be- 
tween the hard calling of the sea and the still harder calling of a rude and 
scantily remunerative agriculture. 

The physical differences between the two countries are far more striking 
than the political and social differences. They are, indeed, almost incalcu- 
lable. Great Britain is an island less than 90,000 square miles in extent. It 
Mes in the far north. Its southermost point is nearly 30 degrees of latitude 



above the tropics. Its northernmost point is but 9 degrees below the Arctic 
Circle. Within its area the exchange of natural products is necessarily lim- 
ited. Its life depends upon its connection with other countries. Its pros- 
perity rests upon its commerce with the world. On the other hand, a single 
State of the Union is nearly three times as large as Great Britain. Several 
other States are each quite equal to it in area. The whole Union is well-nigh 
forty times as large. Alaska excepted, the northernmost point of the Union 
is but 60 miles south of the southernmost part of Great Britain, and the south- 
ernmost point of the Union is but little more than 100 miles from the tropics. 
Its natural products are more varied, more numerous and of more valuable 
character than those of all Europe. To quote one of Mr. Gladstone's phrases, 
we constitute "not so much a country in ourselves as a world." He tells us 
that we carry on "the business of domestic exchanges on a scale such as man- 
kind has never seen." Our foreign commerce, very large in itself, is only as 
1 to 25 compared to our internal trade. And yet Mr. Gladstone thinks that 
a policy which is essential to an island in the northern ocean should be adopt- 
ed as the policy of a country which even to his own vision, is "a world within 
itself." 

With these fundamental points of difference between the two countries I 
assume that varied financial and industrial systems, wrought by the expe- 
rience of each, would be the natural and logical result. Hence I do not join 
issue with Mr. Gladstone on both of his propositions. He defends free trade 
in Great Britain. He assails protection in the United States. The first propo- 
sition I neither deny nor aflGirm. Were I to assume that protection is in all 
countries and under all circumstances the wisest policy I should be guilty of an 
error similar to that which I think Mr. Gladstone commits. It might be diffi- 
cult to prove that free trade is not the wisest financial policy for Great Brit- 
ain. So far from guarding herself against material imported from other 
countries, her industrial system would wither and die if foreign products were 
withheld for even a brief period. She is in an especial degree dependent upon 
the products of other nations. Moreover, she does not feel bound to pay heed 
to the rate of wages which her labor may receive. That, like the fabrics which 
her labor creates, must take its chance in the markets of the world. 

On many points and in many respects it was far different with Great Brit- 
ain a hundred years ago. She did not then feel assured that she could bear the 
competition of Continental nations. She was, therefore, aggressively, even 
cruellj^ protective. She manufactured for herself and for her network of colo- 
nies reaching around the globe. Into those colonies no other nation could carry 
anything. There was no scale of duty upon which other nations could enter a co- 
lonial port. What the colonies needed outside of British products could be fur- 
nished to them only in British ships. This was not protection! It was prohibi- 
tion, absolute and remorseless, and it was continued even to the day when Mr. 
Gladstone entered upon his long and splendid career in Parliament. It was not 
broken, though in some respects it was relaxed, until in the fullness of time 
British energy had carried the wealth and the skill of the Kingdom U> the point 
v\ here no competitiou could be feared. 



GREAT BRITAIN'S PROSPERITY UNDER PROTECTION. 

During the last thirty years of her protective system, and especially dur- 
ing the twenty years from 1826 to 1846, Great Britain increased her material 
wealth beyond all precedent in the commercial history of the world. Her 
development of steam power gave to every British workman the arms of 
Briareus, and the inventive power of her mechanicians increased the amount, 
the variety, and the value of her fabrics beyond all anticipation. Every year 
of that period witnessed the addition of millions upon millions of sterling to 
the reserve capital of the Kingdom; every year witnessed a great addition to 
the effective machinery whose aggregate power was already the wonder of 
the world. The onward march of her manufacturing industries, the steady and 
rapid development of her mercantile marine, absorbed the matchless enterprise 
and energy of the Kingdom. Finally, with a vast capital accumulated, with a low 
rate of interest established, and with a manufacturing power unequaled, the 
British merchants were ready to underbid all rivals in seeking for the trade of 
the world. 

At that moment Great Britain had reason to feel supremely content. She 
found under her own flag, on the shores of every ocean, a host of consumers 
whom no man might number. She had Canada, Australia and India with open 
ports and free markets for all her fabrics; and more than all these combined, she 
found the United States suddenly and seriously lowering her tariff and effectively 
abolishing protection at the very moment England was declaring for free trade. 
The traffic of the world seemed prospectively in her control. Could this condition 
of trade have continued, no estimate of the growth of England's wealth would be 
possible. Practically it would have had no limit. Could she have retained her 
control of the markets of the United States as she held it for the four years pre- 
ceding the outbreak of the civil war, the American people w^ould have grown com- 
mercially dependent upon her in a greater degree than in Canada or Australia 
to-day. 

But England was dealing with an intelligence equal to her own. The Ameri- 
can people had, by repeated experi ence, learned that the periods of depression 
in home manufactures were those in which England most prospered in her com- 
mercial relations with the United States, and that these periods of depression 
had with a single exception, easily explained, followed the enactment by Con- 
gress of a free- trade tariff* as certainly as effect follows cause. One of the most 
suggestive experiments of that kind had its origin in the tariff to which I have 
just referred, passed in 1846 in apparent harmony with England's newly declar- 
ed financial policy. At that moment a Southern President (Mr. Polk) and a 
Southern Secretary of the Treasury (Mr. Robert J. Walker) were far more inter- 
ested in expanding the area of slave territory than in advancing home manufac- 
tures, and were especially eager to make commercial exchanges with Europe on 
the somewhat difficult basis of cotton at high prices knd returning fabrics at low 
pricea. 

*The phrase "free-trade tariff involves a contradiction of terms. It is used 
to designate that form of duty which is levied with no intention to protect do- 
mestic manufactures. 



AIDS TO FREE TRADE, 1846-56. 

Under ordinary circumstances the free-trade tariff of 1846 would have 
promptly fallen under popular repi-obation and been doomed to speedy repeal. But 
it had a singular history, and for a time was generally acquiesced in, even at- 
taining in many sections a certain degree of popularity. Never did any other 
tariff meet with so many and so great aids of an adventitious character to sus- 
tain it as did this enactment of 1846. Our war with Mexico began just as the 
duties were lowered, and the consequence was the disbursement of more than 
$100,000,000 in a way that reached all localities and favorably affected all in- 
terests. This was a great sum of money for that period, and for the years 1846, 
1847 and 1848 it considerably more than doubled the ordinary outlay of the Gov- 
ernment. In the middle of this period the Irish famine occurred and called for 
an immense export of breadstuffs at high prices. The discovery of gold in Cali- 
fornia the succeeding year flushed the channels of business as never before by 
rapidly enlarging the circulation of coin in all parts of the country. Before this 
outpouring of gold had ceasod the three great nations of Europe, as precedence 
was reckoned at that time — England, France and Russia— entered upon the Cri- 
mean war. The export of manufactures from England and France was check- 
ed; the breadstuffs of Russia were blockaded and could not reach the markets 
of the world. An extraordinary stimulus was thus given to all forms of trade in 
the United States. For ten years, 1846 to 1856, these adventitious aids came in 
regular succession and exerted their powerful influence upon the prosperity of 
the country. 

PRESIDENTIAL CONDEMNATION OF FREE TRADE RESULTS. 

The withdrawal or termination of these influences by a treaty of peace in 
Europe and by the surcease of gold from California placed the tariff of 1846 
where a real test of its merits or its demerits could be made. It was every- 
where asked with apprehension and anxiety: Will this free-trade tariff now 
develop and sustain the business of the country as firmly and securely as it 
has been developed and sustained by protection? The answer was made in 
the ensuing year by a widespread financial panic, which involved the ruin of 
thousands, including proportionately as many in the South as in the North, 
leaving the country disordered and distressed in all the avenues of trade. 
The disastrous results of this tariff upon the permanent industries of the coun- 
try are described in President Buchanan's well-remembered message, commu- 
nicated to Congress after the panic: "With unsurpassed plenty in all the elements 
of national wealth, our manufacturers have susi>ended, our public works are re- 
tarded, our private enterprises of different kinds are abandoned, and thousands 
of useful laborers are thrown out of employment and reduced to want." This 
testimony as to the r^ult of a free-trade tariff is all the more forcible from the 
fact that Mr. Buchanan, as a member of President Polk's Cabinet, had consent- 
ed to the abandonment of protection, which in his earlier career he had earnestly 
BupportccL 



If these disasters of 1857, flowing from the free trade tariff, could have been 
regarded as exceptional, if they had been without parallel or precedent, they 
might not have had so deadly a significance. But the American people had 
twice before passed through a similar experience. On the eve of the war of 
1812 Congress guarded the national strength by enacting a highly protective 
tariff. By its own terms this tariff must end with the war. When the new 
tariff was to be formed a poular cry arose against "war duties," though 
the country had prospered under them despite the exhausting effect of the 
struggle with Great Britain. But the prayer of the people was answered 
and the war duties were dropped from the tariff of 1816. The business of the 
country was speedily prostrated. The people were soon reduced to as great 
distress as in that melancholy period between the close of the Revolutionary 
war and the organization of the National Government — 1783 to 1789. Colonel 
Benton's vivid description of the period of depression following the reduction 
of duties comprises in a few lines a whole chapter of the history of free trade 
in the United States: 

"No price for property, no sales except those of the Sheriff and the marshal, 
no purchasers at execution sales except the creditor or some hoarder of money, 
no employment for industry, no demand for labor, no sale for the products 
of the farm, no sound of the hammer except that of the auctioneer knocking 
down property. Distress was the universal cry of the people, relief the uni- 
versal demand." 

PROTECTIVE TARIFF BROUGHT RELIEF. 

Relief came at last with the enactment of the protective tariff of 1824. to 
the support of which leading men of both parties patriotically united for the com- 
mon good. That act, supplemented by the act of 1828, brought genuine pros- 
perity to the country. The credit of passing the two protective acts was not 
due to one party alone. It was the work of the great men of both parties. 
Mr. Clay and General Jackson, Mr. Webster and Mr. Van Buren, General Wil- 
liam Henry Harrison and Richard M. Johnson, Silas Wright and Louis McLane 
voted for one or the other of these acts and several of them voted for both. 
The co-operation of these eminent men is a great historic tribute to the neces- 
sity and value of protection. Plenty and prosperity followed as if by magic 
the legislation to which they gave their support. • We have their concurrent 
testimony that the seven years preceding the enactment of the protective 
tariff of 1824 were the most discouraging which the young Republic in its brief 
life had encountered, and that the seven years which followed its enactment 
were beyond precedent the most prosperous and happy. 

Sectional jealousy and partisan zeal could not endure the great develop- 
ment of manufactures in the North and East which followed the apparently 
firm establishment of the protective policy. The free trade leaders of the 
South believed — at least they persuaded others to believe — that the man- 
ufacturing States were prospering at the expense of the planting States. 
Under the lead of Calhoun South Carolina rebelled and President Jackson, 
who had so strikingly shown his faith in the policy of protection, was not 



1 



9 

able to resist the excitement and resentment which the free traders had 
created in the cotton States. He stood between hostile policies, represented 
by his two bitterest personal enemies— Clay for protection, Calhoun for free 
trade. To support Clay would ruin Jackson politically in the South. He 
could not sustain Calhoun, for, aside from his opposition to free trade, he 
had cause for hating him personally. He believed, moreover, that Calhoun 
was at heart untrue to the Union, and to the Union Jackson was as devoted 
as Clay. Out of this strange complication came, not unnaturally, the sacri- 
fice of the protective tariff of 1S24-182S and the substitution of the compro- 
mise tariff of 1833, which established an ad valorem duty of 20 per cent, on all 
imports and reduced the excess over that by a 10 per cent, annual sliding scale 
for the ensuing ten years. Like all compromises, it gave complete satisfac- 
tion to neither party, but it was received with general acquiescence from the 
belief that it was the best practical solution of the impending difBculties. 
The impending difficulties were two. One was the portentous movement 
which involved the possibility of dissolving the Union. The other was the 
demand for a free trade tariff as the only measure that could appease the 
Southern nullifiers. Disunion and free trade from that time became asso- 
ciated in the public mind — a source of apprehension in the North, a source of 
political power in the South. Calhoun was the master spirit who had given 
the original impulse both to disunion and free trade. Each in turn strength- 
ened the other in the South, and both perished together in the war of the 
rebellion. 

For a time satisfaction wae felt with the tariff adjustment of 1833, because 
it was regarded as at last a temporary reconciliation between two sections of 
the Union. Before the sliding scale was ruinously advanced there was great 
stimulus to manufacturing and to trade, which finally assumed the form of 
dangerous speculation. The years of 1834, 1835 and 1836 were distinguished 
for all manner of business hazard, and before the fourth year opened the 30 
per cent, reduction (three years of 10 per cent, each) on the scale of duties 
was beginning to influence trade unfavorably. The apprehension of evil soon 
became general, public confidence was shaken, the panic of 1837 ensued, and 
business reversals were rapid, general and devastating. 

The trouble increased through 1838, 1839 and 18-10, and the party in power, 
held resposible for the financial disasters, fell under popular condemnation. 
Mr. Van Buren wae defeated and the elder General Harrison was elevated 
to the Presidency by an exceptionally large majority of the electoral votes. 
There was no relief to the people until the protective tariff of 1842 was en- 
acted, and then the beneficent experience of 1824 was repeated on even a 
more extensive scale. Prosperity, wide and general, was at once restored. But 
the reinstatement of the Democratic party to power two years later by the 
election of Mr. Polk to the Presidency, followed by a perverse violation of pub- 
lic pledges on the part of the men in important places of administration, led 
to the repeal of the protective act and the substitution of the tariff' of 1846, 
to which I hare already adverted, and whose effects upon the country I have 

briefly outlined. 

In.— Bl. I e -. 



10 

FEEE TEADE BEOUGHT DISASTEES ; PEOTECTION BEOITGHT 

PEOSPEEITY. 

Measuring, therefore, from 1812, when a protective tariff was enacted to 
give strength and stability to the Government in the approaching war with. 
Great Britain, to 1861, when a protective tariff was enacted to give strength 
and stability to the Government in the impending revolt of the Southern 
States, we have fifty years of suggestive experience in the history of the 
Republic. Dm-ing this long period free trade tariffs were thrice followed by 
industrial stagnation, by financial embarrassment; by distress among all classes 
dependent for subsistence upon their own labor. Thrice were these burdens 
removed by the enactment of a protective tariff. Thrice the protective tariff 
promptly led to industrial activity, to financial ease, to prosperity among the 
people. And this happy condition lasted in each case, with no diminution of 
its beneficent influence, until illegitimate political combinations, having theii 
origin in personal and sectional aims, precipitated another era of free trade. A 
perfectly impartial man, unswerved by the excitement which this question en- 
genders in popular discussion, might safely be asked if the half century's ex- 
perience, with its three trials of both systems, did not establish the wisdom of 
protection in the United States. If the inductive method of reasoning may he 
trusted, we certainly have a logical basis of conclusion in the facts here de- 
tailed. 

And by what other mode of reasoning can we safely proceed in this field of 
controversy? The great method of Bacon was by "rigid and pure observa- 
tion, aided by experiment and fructified by induction." Let us investigate 
"from effects to causes, and not from causes to effects." Surely it is by a 
long series of experiments, and by that test only, that any country can estab- 
lish an industrial system that will best aid in developing its hidden wealth 
and establishing its permanent prosperity. And each country must act intel- 
ligently for itself. Questions of trade can no more be regulated by an exact 
science than crops can be produced with accurate forecast. The unknown 
quantities are so many that a problem in trade or agriculture can never have 
an absolute answer in advance. But Mr. Gladstone, with an apparent confi- 
dence in results as unshaken as though he were dealing with the science of 
numbers, proceed* to demonstrate the advantage of free trade. Ke is posi- 
tively certain in advance of the answer which experiment will give, and the 
inference is that nothing is to be gained by awaiting the experiment. Mr. 
Gladstone may argue for Great Britain as he will, but for the United State* 
we must insist on being guided by facts and not by theories; we must insist 
on adhering to the teachings of experiments which "have been carried forward 
by careful generalization to well-grounded conclusions." 

CAUSES OF THE PANIC OF 1873. 

As an offset to the charge that free-trade tariffs have always ended in 
panics and long periods of financial distress, the advocates of free trade point 
to the fact that a financial panic of great severity fell upon the country in 
1873, when the protective tariff of 1861 was in full force, and that, therefore, 
panic and distress follow periods of protection as well as periods of free trad©. 



11 

ft is true that a financial panic occurred in 1873, and its existence would blunt 
the force of my argument if there were not an imperatively truthful way of 
accounting for it as a distlDct result from entkely distinct causes. The panic 
of 1873 was widely different in its true ori^n froim tlio®a wWdi I bare beea 
exposing. The civil war, which closed in 1865, had sacrificed on both sides a 
vast amount of property. Reckoning the money directly expended, the value 
of property destroyed, and the production arrested and prevented, the total 
fs estimated to be nine thousand millions of dollars. The producers of the 
country had been seriously diminished in number. A half million men. had been 
killed. A million more had been disabled in various degrees. Help was need- 
ed in the honorable form of pensions, and the aggregate required for this pur- 
pose exceeded all anticipation, and has annually absorbed an immense propor- 
tion of the national income. The public debt that must be funded reached near- 
ly three thousand millions, demanding at the beginning more than $150,000,000 
for annual interest. A great proportion of the debt, when funding was com- 
plete, was held in Europe, calling for an enormous export of gold or its equiva- 
lent, to meet the interest 

Besides these burdens upon the people, the country was on a basis of paper 
money, and all gold payments added a heavy premium to the weight of the obli- 
gation. The situation was without parallel. The speculative mania which always 
accompanies war had swollen private obligations to a perilous extent, and the 
important question arose of restoring coin payment. On the one hand it was 
contended that to enforce the measure would create a panic by the shrinkage 
of prices which would follow; and on the other hand it was urged with equal 
zeal that to postpone it longer would increase the general distrust among the 
people as to the real condition of the country, and thus add to the severity of 
the panic, if one should be precipitated. 

Notwithstanding the evil prophecies on both sides, the panic did not come 
until eight and a half years after the firing of the last gun in the civil war. 
Nor did it come, until after two great calamities in the years immediately pre- 
ceding had caused the expenditure of more than $200,000,000, suddenly with- 
drawn from the ordinary channels of business. The rapid and extensive rebuild- 
ing in Chicago and Boston after the destructive fires of 1871 and 1872 had a 
closer connection with the panic of 1873 than is commonly thought. Still further, 
the six years' depression, from 1873 to 1879, involved individual suffering 
rather than general distress. The country as a whole never advanced in wealth 
more rapidly than during that period. The entire experience strengthened the be- 
lief that the war for the Union could not have been maintained upon a free- 
trade ba|iis, and that the panic of 1873 only proved the strength of the safe- 
guard which protection supplies to a people surrounded by such multiform em- 
barrassments as were the people of the United States during the few yeani 
immediately following the war. And, strongest of all points, the financial dis- 
tress was relieved and prosperity restored under protection, whereas the ruin- 
ous effects of panics under free trade have never been removed except by a 
resort to protection. 

Does Mr. Gladstone maintain that I am confusing post hoc witii pi*opter 
hoc in these statements? He must show, then, that the United States during 



12 

the war could have collected a great internal revenue on domestic mrnu' 
factures and products, when under the system of free trade similar fabrics 
would daily have reached New York from Europe to be sold at prices far 
below what the American manufacturer, with the heavy excise then levied, 
could afford to set upon his goods. And if the Government could collect 
little from the customs under free trade and nothing from internal products, 
whence could have been derived the taxes to provide for the payment of in- 
terest on public loans, and what would hare become of the public credit? 
MoreoTer, with free trade, which Mr. Gladstone holds to be always and 
•mder all circumstances wiser than protection, we should have been com- 
pelled to pay gold coin for European fabrics, while at home and during th* 
tremendous strain of the war legal-tender paper was the universal currency 
In other words, when the life of the country depended upon the Govern- 
ment's ability to make its owti notes perform the function of money the 
free-traders' policy would have demanded daily gold fcr daily bread. 

COMPARISON OF PROTECTION AND FREE TRADE PERIODS. 

The free trader cannot offset the force of the argument by claiming thai 
the laws regulating revenue and trade are, like municipal laws, silent durins 
the shock of arms, because the five closing years — indeed, almost six years— 
of the decade in which the rebellion occurred were passed in peace, and dur- 
ing those years the ravages of war were in large degree repaired and new 
wealth rapidly acquired. But I shall not give to Mr. Gladstone or to the Ameri- 
can free trader the advantage of seeming to rest the defense of protection 
upon its marvelous value during the exhaustive period of war. Viewing the 
country from 1S61 to 1889 — full 28 years — the longest undisturbed period 
in which either protection or free trade has been tried in this country, 
I ask Mr. Gladstone if a parallel can be found to the material advancement of 
the United States? 

Mr. Gladstone admits the wonderful increase of wealth acquired under a 
protective tariff, but he avers that the results would have been larger under 
free trade. That, of course, is a speculative opinion, and is entitled to re- 
spect according to the knowledge and e^pciience of the man who utters it. 
Every statement of Mr. Gladstone carries weight, but in thi» case his opinion 
runs directly counter to the fifty years of firancial experience through which 
this country has passed with alternate trials of the two system. Moreover. 
it is fair to say that Mr. Gladstone does rot in his utterance represent Euro- 
pean judgment. He speaks only for the free-trade party of Great Britain 
and their followers on this side of the ocean. The most eminent statesman 
on the Continent of Europe holds opinions on this subject directly the reverse 
of those held by the most eminent statesman of Great Britain. We feel as- 
sured in America that so far as the question of protection may be affected, 
either favorably or adversely, by the weight of individual judgment, we may 
safely leave Mr. Gladstone to be answered by Prince Bismarck. 

But better than the opinion of Mr. Gladstone, better than the oprnior of 

Prince Bismarck, are the simple facts of the case of open record in both 

countries. A brief rehearsal of these facts, with the pertinent comparison 



13 

which they suggest, will give the best answer to Mr. Gladstone's assumption 
that the United States would have made more rapid progress under a system 
of free trade. I take the official figures of the census of the United States, 
and for the United Kingdom I quote from Mr. Giffen, who is commended by 
Mr. Gladstone as the best authority in England. 

In 1860 the population of the United States was, in round numbers, 31,- 
000,000. At the same time the population of the United Kingdom was, in round 
numbers, 29,000,000. The wealth of the United States at that time was four- 
teen thousand millions of dollars; the wealth of the United Kingdom was twen- 
ty-nine thousand million dollars. The United Kingdom had, therefore, 
nearly the same population, but more than double the wealth of the United 
States, with machinery for manufacturii g fourfold greater than that of the 
United States. At the end of twenty years (1880) it appeared that the United 
States had added nearly thirty thousand millions of dollars to her wealth, 
while the United Kingdom had added nearly fifteen thousand millions, or 
about one-half. 

During this period of twenty years the United States had incurred the 
enormous loss of nine thousand millions of dollars by internal war, while 
the United Kingdom was at peace, enjoyed exceptional prosperity, and made a 
far greater gain than in any other twenty years of her history— a gain which 
during four years was in large part due to the calamity which had fallen 
upon the United States. The United Kingdom had added 6,000,000 to her 
population during the period of twenty years, while the addition of the United 
States exceeded 18,000,000. 

By the compound ratio of population and wealth in each country, even 
without making allowance for the great loss incurred by the Civil War, it is 
plainly shown by the statistics here presented that the degree of progress in 
the United Kingdom under protection far exceeded that of the United King- 
dom under free trade for the period named. In 1860 the average wealth per 
capita of the United Kingdom wag ?1(X)0, while in the United States it was but 
$450. In 1880 the United Kingdom ha^ increased her per capita wealth to 
$1230. while the United States had increased her per capita wealth to $870. 
The United Kingdom had in twenty years increased her per capita wealth 23 per 
cent., while the United States had increased her per capita wealth more than 
93 per cent. If allowance should be made for war losses, the ratio of gain in 
the United States would far exceed 100 per cent Upon these results, what 
ground has Mr. Gladstone for his assertion? 

PERTIHENT FACTS REGARDING STEEL RAILS. 

With great confidence Mr. Gladstone proposes to carry the war for free 
trade into the enemy's ••untry. Perhaps the enemy, who are only modest pro- 
tectionists, may embarass the march of his lo^ic with a few pertinent ques- 
tions, or at least abate the rate of speed which he proposes for his trumphant 
movement. I shall not gire counter theories. I shall only cite established 
facts and allow the facts to establish their own theories: 

1. John Edgar Tliomi>son, late president of the Pennsylvania Railroad Com- 
pany, purchased 100 tons of steel rails in 1862 at a price (freight paid to New 



14 



York, duty of 45 per cent, unpaid) of $103.44, gold coin. (By way of illustra- 
ting Mr. Gladstone's claim to superior quality of manufactures under free 
trade, the railroad company states that many of the rails broke during tb* 
first winter's trial). In 1864 English rails had fallen to $88 per ton in New 
York, the freight paid and the duty unpaid. English manuafacturers held the 
market for the ensuing six years, though the sales at the high prices were lim- 
ited. In 1870 Congress laid a specific duty of $28 per ton on steel rails. From 
that time the home market has been held by our own manufacturers, with a 
steady annual fall in price as the facilities of production increased, until the 
past summer and autumn, when steel rails were selling in Pittsburg, Chi- 
cago and Lfondon at substantially the same prices. Does any free trader ob 
either side of the ocean honestly believe that American rails could ever have 
been furnished as cheaply as English rails except by the sturdy competition 
which the highly protective duty of 1870 enabled the American manufactur- 
ers to maintain against the foreign manufacturers in the first place, and 
among American manufacturers themselves in the second place? It ia not 
asserted that during the 19 years since the heavy duty was first estab- 
lished (except during the past few months) American rails have been as cheap 
in America as English rails hare been in England, but it is asserted with per- 
fect confidence that, steadily and invariably, American railroad companies 
have bought cheaper rails at home than they would have been able to buy in 
England if the protective duty had not stimulated the manufacture of steel 
rails in the United States and if the resulting competition had not directly 
operated upon the English market.* 

FORCED TO LOWER PRICES. 

Under the protective duty of 1870 the United States soon manufactured 
annually a much larger quantity of steel than Great Britain, and reduced 
the price from $100 per ton in gold to less than $35 per ton in gold. 



• In 1870 only 30,000 tons of steel rails were 
manufactured in the United i^tates. But the pro- 
duct under the increased duty of that year rapidly 
increased. The relative number of tons produced 
in England and the United States for a period of 
12 years is shown as follows : 


For the same period, 1877-1888, inclusive, the 
following table will show the number of tons o^ 
steel ingots produced in the two countries respec- 
tively : 


Year. 


England. 


United 
States. 


Year. 


England. 


United. 
States. 


1877 


508,400 

622,390 

520,231 

732,910 

1,023,740 

1,235,785 

1,097.174 

784,968 

706,583 

730,343 

1,021,847 

979,083 


385,865 

491,427 

610,682 

852,196 

1,187,770 

1,284,067 

1,148,709 

996,983 

959,471 

1,574,703 

2,101,904 

1,386,277 


1877 


750,006 
807,527 
834,511 
1,044,382 
1,441,719 
1,673,649 
1,553,380 
1,299,676 
1,304,127 
1,570,520 
2,089,403 
2,032,794 


500 524 


1878 


1878 


653 773 


1879 


1879. 


829,439 
1,074,262 
1,374,247 
1,514,687 
1,477,345 
1,375,531 
1,519,430 
2,269.190 
^936.033 
#,511,161 


1880 


1880 


1881 


1881 


1882 


1882 


1883 


1883 


1884 


1884 

1885 


1885 


1886 


1886 


1887 


1887 


1888 


1888 




Total in 12 
years.... 


Total in 12 
years 


9,963,454 


12,980,054 


16,401,688 


18,035,622 



15 

2. English steel for locomotive tires imported in 1865, duty paid, was 34- 
tents per pound in gold. The American competition, under a heavy pro- 
tective duty, had by 1872 reduced the price to 13 cents per pound, duty 
paid. At the present time (1889) American steel for locomotive tires, of as 
food quality as the English steel formerly imported, is furnished at 4% cents , 
per pound and delivered free of cost at the point where the locomotives are 
manufactured. The lowering of price was not a voluntary act on the part of 
the English manufacturer. It was the direct result of American competition 
under a protective duty — a competition that could not have been successfully 
inaugurated under free trade. 

3. In the year 1860, the last under a free-trade policy, the population of 
31,000,000 in the United States bought carpets to the amount of $12,000,000. 
Nearly half of the total amount was imported. In 1888, with a population 
*itimated at 63,000,000, the aggregate amount paid for carpets was nearly 
$60,000,000, and of this large sum less than $1,000,000 was paid for foreign 
carpets and about $500,000 for oriental rugs. Does any free trader in 
England believe that the United State fe;, without a protective tariff, cDudd 
have attained such control of its own carpet manufacture and trade? It will 
not be unnoticed in this connection that under a protective tariff the popu- 
lation by reason of better wages was enabled to buy a far greater proportion 
of carpets than under free trade. Nor must it escape observation that car- 
pets are now furnished to the American buyer under a protective tariff much 
cheaper than when a nonprotective tariff allowed Europe to send so large a 
proportion of the total amount used in the United States. 

These illustrations might be indefinitely multiplied. In woolens, in cottons, 
in leather fabrics, in glass, in products of lead, of brass, of copper; indeed, in 
the whole round of manufactures it will be found that protection has brought 
down the price from the rate charged by the importers before protection had 
built up the competing manufacture in America. For many articles we pay 
less than is paid in Europe. If we pay higher for other things than is paid 
across the sea to-day, figures plainly indicate that we pay less than we should 
have been compelled to pay if the protective system had not been adopted; 
and I beg Mr. Gladstone's attention to the fact that the American people 
have much more wherewith to pay than they had or could have under free- 
trade.* 

* In spite of these facts President Cleveland made the following statements^ 
■which I quote from his free trade message to Congress in December, 1887: 

"Our present tariff laws, as their primary and plain effect, raise the price- 
to consumers of all articles imported and subject to duty by precisely the sum 
paid by those who purchase* for use these imported articles. Many of these 
things, however, are raised or manufactured in our own country, aud the 
duties now levied upon foreign goods and products are called protection to 
these home manufactures, because they render it possible for those of our 
people who are manufacturers to make these taxed articles and s**ll them for 
a price equal to that demanded for the imported goods that have paid customs 
duty. So it happens that, while comparatively a few use the imported articles, 
millions of our people who never use and never saw any of the foreign prod- 
uct purchase and use things of the same kind made in this country and pay 
therefor nearly or quite the same enhanced price which the dutj' adds to the 
imported articles." 



13 

I recall this quotation primarily for two reasons. First, Mr, Cleveland 
stands without a rival at the head of the free trade p^rty in the United 
States, and it is instructive to see how exactly he adopts the line of argument 
used by the English free trader. Second, it is a valuable admission from 
the head of the free trade party when he affirms that "comparatively a few 
of our people use imported articles," and that there are "millions of our peo- 
ple who never use and never saw any of the foreign products." In what 
words could the complete success of the protective policy in the United States 
be more fitly expressed? 

MR, CLEVELAND'S MISINFORMATION. 

But when Mr. Cleveland asserted that our people pay for our domestic fab- 
rics "nearly or quite the same enhanced price which the duty adds to the 
imported articles," he evidently spoke without investigating the facts, and ac- 
cepted as true one of those fallacious statements which have been used in the 
interest of foreign importers to deceive the people. Mr. Cleveland's argu- 
ment would have been strengthened if he had given a few examples — ^nay, if 
he had given one example — to sustain his charge. A© he omitted all illustra- 
tions of his position, I venture to select a few which apparently establiah the 
exact reverse of Mr. Cleveland's statement: 

India rubber goods arc protected by a duty of 25 per cent; but, instead of 
those goods being 25 per , cent, higher in price than the foreign goods, they are 
in fact cheaper. They undersell the English article in Canada and success- 
fully compete with Canada's goods, which are protected by a duty of 20 per 
cent. 

Patent leather is subject to a duty of 20 per cent.; but patent leather ie not 
therefore 20 per cent, higher in the United States than elsewhere. On the 
contrary, it is cheaper. Five years ago the city government of London 
advertised for bids for a large amount of patent leather to be used in con- 
nection with the uniforms of the police. There were bids from several coun- 
tries, but the lowest bid was offered by a manufacturer of Newark, N. J. 
He secured the contract and furnished the goods at a fair profit. 

Steel rails are selling in London for £7 per ton. The duty i« $15 per ton 
The price, therefore, in the United States ought to be, according to Mr. 
Cleveland's doctrine, $50 per ton. But in fact the price ie but $35 per ton» 
and during the last summer and autumn was as low as $25 per ton, and 
large sales were made at $30 per ton. 

Boots and shoes are subject to 30 per cent duty. According to Mr. Cleve- 
land they should be 30 per cent, higher than the foreign article. As a matter 
of fact they are cheaper. American boots and shoes hold the Canadian mar- 
ket against the European manufacture. 

Examples of this kind could be shown on almost the whole tariflE list where 
an American manufacturer is firmly established. In fact, the whole history 
of protection has vindicated what Alexander Hamilton said of it when he was 
at the head of the Treasury: "The internal competition which take* i^ace soon 
does away with everything like monopoly and by degrees reduces the price of 



17 

the article to the minimum of a reasonable profit on the capital employed. 
This accords with the reason of the thing and with experience." Mr. Hamil- 
ton thus effectually answers both Mr. Gladstone and Mr. Cleveland. 

TAKES ISSUE WITH GLADSTONE. 

Mr. Gladstone boldly contends that "keepmg capital at home by protection 
is dear production, and is a delusion from top to bottom." I take direct issue 
with him on that proposition. Between 1870 and the present time considerably 
more than 100,000 miles of railroad have been built in the United States. The 
steel rail and other metal connected therewith involved so vast a sum of money 
that it could not have been raised to send out of the country in gold coin. The 
total cost could not have been less than $500,000,000. We had a large interest 
to pay abroad on the public debt, and for nine years after 1870 gold was at a 
premium in the United States. During those years nearly 40,000 miles of rail- 
way were constructed, and to import English rail and pay for it with gold 
bought at a large premium would have been impossible. A very large propor- 
tion of the railway enterprises would of necessity have been abandoned if the 
export of gold to pay the rails had been the condition precedent to their con- 
struction. But the manufacture of steel rails at home gave an immense stimu- 
lus to business. Tens of thousands of men were paid good wages, and great in- 
vestments and great enrichments followed the line of the new road and 
opened to 'the American people large fields for en>jrprise not heretofore ac- 
cessible. 

I might ask Mr. Gladstoie what he would have done with the labor of Ihe 
thousands of men engaged in manufacturing rail if it had been judged prac- 
ticable to buy the rail in England. Fortunately he has given his answer in 
advance of the question, for he tells us that "in America we produce more 
cloth and more iron at high prices, instead of more cereals and more cotton 
at low prices." The grain growers of the West and the cotton growers of the 
South will observe that Mr. Gladstone holds out to them a cheerful prospect! 
They "should produce more cereals and more cotton at low prices!" Mr. Glad- 
itone sees that the protective system steadily tends to keep up the price of 
'cereals and cottoji," and he asks that manufactures of "cloth and iron" be 
dbandoned, so that we may raise "more cereals and more cotton at low 
prices." Mr. Gladstone evidently considers the present prices of cereals and 
;otton as "high prices." 

Protectionists owe many thanks to Mr. Gladstone for his outspoken mode 
Df dealing with this question of free trade. 'He gives us his conclusions with- 
out qualification and without disguise. The American free trader is not so 
sincere. He is ever presenting half truths and holding back the other half, 
thus creating false impressions and leading to false conclusions. But Mr. Glad- 
stone is entirely frank. He tells the laborers on protected articles that they 
would be better engaged in "raising more cereals and more cotton at low 
prices." Where does Mr. Gladstone suggest a market for the additional grain 
and cotton to be raised by American mechanics becoming farmers and increas- 
ing the production of those great staples? The foreign market is filled with a 
competing grain supply to such a degree that already the price of wheat is 



18 

nnduly lowered to the- Western farmer. The farmer needs a still larger home 
consumption of his grain, while Mr. Gladstone thinks he needs a still larger 
home production. The legitimate involvemSnt of Mr. Gladstone's argument is 
that all mechanical and manufacturing enterprises in America producing arti- 
cles of higher price than the same produced in Europe should be abandoned, and 
the laborers so engaged should be turned to the production of "more cereals and 
more cotton at low prices." The Western farmer's instinct is wiser than Mr. 
Gladstone's philosophy. The farmer knows that the larger the home market 
the better are his prices, and that as the home market is narrowed his prices 
fall. 

Mr. Gladstone's pregnant suggestion really exhibits the thought that lies 
deep in the British mind, that the mechanic arts and manufacturing processes 
should be left to Great Britain, and the production of raw material should 
be left to America. It is the old colonial idea of the last century, when 
the establishment of manufactures on this side of the ocean was regarded with 
great jealousy by British statesmen and British merchants. Some years be- 
fore the Revolutionary struggle began Parliament had declared that "the erect- 
ing of manufactories in the colonies tends to lessen their dependence on Great 
Britain." A few years later the British Board of Trade reported to Parlia- 
ment that "manufactures in the American colonies interfere with profits made 
by British merchants." The same body petitioned Parliament that "some 
measures should be provided to prevent the manufacturing of woolen and linen 
goods in the colonies." Finally Parliament declared that "colonial manufactur- 
ing was prejudicial to the trade and manufactures of Great Britain." These 
outrageous sentiments (the colonists characterized them much more severely) 
were cherished in the time of the glorioua Georges, in the era of Walpole and 
the. elder Pitt. 

FOE GEEAT BEITAIF, NOT AMERICA. 

I do not mean to imply that Mr. Gladstone's words carry with them an ap- 
proval, even retrospectively, of this course toward the colonies, but there is a 
remarkable similarity to the old policy in the fundamental idea that causes 
him in 1889 to suggest that Americans produce "too much cloth and too much 
iron," and should turn their labor to "low-priced cereals and low-priced cot- 
ton." Are we not justified in concluding that Mr. Gladstone's theory of free 
trade, in all its generalizations and specifications, is fitted exactly to the con- 
dition of Great Britain, and that British hostility to American protection fijids 
its deep foundation in the fact, to quote the old phrase, that "it is prejudicial 
to the trade and manufactures of Great Britain," that "it lessens our depend- 
ence upon Great Britain," and that "it interferes with profits made by British 
merchants?" 

Mr. Gladstone makes another statem"nt of great frankness and of great 
value. Comparing the pursuits in the United States which require no pro- 
tection with those that are protected, he says: "No adversary will, I think, 
venture upon saying that the profits are larger in protected than in unprotected 
industries." This is very true, and Mr. Gladstone may be surprised to hear 
that the constant objection made by American free traders against the "pro- 



19 

tected inclnstries," as he terms them, is that the profits derived from them are 
illegitimately large. Mr. Gladstone sees clearly that as a rule this i« not true, 
and he at once discerns the reason. He says: "The best opinions seem to tes- 
tify that in yonr protected trades profits are hard pressed by wages." The free 
traders of America try by every cunning device to hide this fact. Its admis- 
sion is fatal to their cause. Not one free trade organ or leader among them all 
dares to take his position beside Mr. Gladstone and plainly tell the truth to 
the American laborer. Not one free trade organ or leader dares frankly to say 
to the great body of American workmen that the destruction of protection in- 
evitably and largely reduces their daily wages. I thank Mr. Gladstone for 
this testimony, at once accurate and acute. It is fair to presume that he in- 
tends it to be applied to the unprotected manufacturer in England and to the 
protected manufacturer in America, both producing the same article. His logic 
gives, and I have no doubt truly, as large profit to the manufacturer of Eng- 
land, Celling at a low price, as to the manufacturer of America, selling at a 
high price— the difference consisting wholly in the superior wages paid to the 
American mechanic. 

There is another important effect of protective duties which. Mr. Gladstone 
does not include in his frank admission. He sees that the laborers in what 
he calls the "protected industries" secure high pay, especially as compared 
with the European school of wages. He perhaps does not see that the effect 
is to raise the wages of all persons in the United States engaged in what Mr. 
Gladstone calls the "unprotected industries." Printers, bricklayers, carpen- 
ters and all others of that class are paid as high wages as those of any 
other trade or calling, but if the wages of all those in the protected classes 
were suddenly struck down to the English standard, the others must follow. 
A million men can not be kept at work for half the pay that another million 
men are receiving in the same country. Both classes must go up or must go 
down together. 

AMERICAN WAGES HIGHER THAN BRITISH. 

Mr. Gladstone makes another contention, in which, from the American 
point of view, he leaves out of sight a controlling factor, and hence refers 
an effect to the wrong cause. Regarding the advance of wages in England 
he says: "Wages which have been partially and relatively higher under pro- 
tection have become both generally and absolutely higher, and greatly 
higher, under free trade." I do not doubt the fact, but I venture to suggest 
that such advance in wages as there has been in England is referable to 
another and a palpable cause — namely, the higher wages in the United States, 
which have constantly tempted British mechanics to emigrate, and which 
would have tempted many more if the inducement of an advance in wages 
at home had not been interposed. Especially have wages been high and 
tempting in the T-^nited States since 1861, when the country became firmly 
protective by the enactment of the Morrill tariff. It will be found, I think, 
that the advance of wages in England corresponds precisely in time, though 
not in degree, with the advance in the United States, and the advance in both 



20 

cases was directly due to the firm establishment of protection in this coun- 
try as a national policy. But it must not be forgotten that American wages 
are still from 70 per cent, to 100 per cent higher than British wages. If a 
policy of free trade should be adopted in the United States, the reduction of 
wages which would follow here would promptly lead to a reduction in Eng- 
land. The operatives of Manchester, Leeds and Sheffield recognize this fact 
as clearly as do the proprietors who pay the advanced wages, and more 
clearly than do certain political economists who think the world of commerce 
and manufactures can be unerringly directed by a theory evolved in a 
closet without sufficient data and applied to an inexact science. 

The zeal of Mr. Gladstone for free trade reaches its highest point in the 
declaration that "All protection is morally as well as economically bad." He 
is right in making this his strongest ground of opposition, if protection is a 
question of morals. But his assertion leaves him in an attitude of personal 
inconsistency. There is a protection on sea as well as on land. Indeed, the 
most palpable and effective form of protection is in the direct payment of 
public money to a line of steamers that could not be maintained without that 
form of aid. I do not say that such aid is unwise protection, least of all do 
I say it is immoral. On the contrary, I think it has often proved the highest 
commercial wisdom, without in the least infringing upon the domain of morale. 
Mr. Gladstone, however, commits himself to the principle that "All 
protection is morally bad." If this has been his belief ever since he became 
an advocate of free trade, his conscience must have received many and severe 
wounds, as session after session, while chancellor of the exchequer, he carried 
through Parliament a bounty — may I not say a direct protection? — of £180,000 
to a line of steamers running between England and the United States— a 
protection that began six years before free trade was proclaimed in English 
manufactures and continued neary twenty years after. In the whole period 
of twenty-five years an aggregate of many millions of dollars was paid out to 
protect the English line against all competition. 

It may be urged that this sum was paid for carrying the Anglo-American 
mails, but that argument will not avail a free trader, because steamers of 
other nationalities stood ready to carry the mails at a far cheaper rate. Nay, 
a few years ago, possibly when Mr. Gladstone was Premier of England, pub- 
lic bids were asked to carry the Anglo-Indian mails. A French line offered a 
lower bid than any English line, but the English Government disregarded 
the French bid and gave the contract to the Peninsular and Oriental line, 
owned by a well-known English company. Still later the German Lloyd Com- 
pany contracted to carry the Anglo-American mails cheaper than any Eng- 
lish line offered, and the German company actually began to perform the 
duty. But Englishmen did not want that kind of free trade, and they broke 
the contract with the German line and again gave protection to the English 
ships. Does not this justify the opinion that the English policy of free trade 
is urged where England can hold the field aganst rivals, and that when com- 
petition leaves her behind she repudiates free trade and substitutes the most pro- 
nounced form of protection? 



21 

Does Mr. Gladstone's estimate of the immorality of protection apply only 
to protection on land, or is supremacy on the sea so important to British in- 
terests that it is better to throw morals to the wind and resort to whatever 
degree of protection may tfe necessary to secure the lead to English ships? 
The doctrine of improving harbors in the United States by the National Gov- 
ernment was for many years severely contested, the strict construction party 
maintaining that it must be confined to harbors on the seacoast at points 
where foreign commerce reaches the country. During one of the many discus- 
sions over this narrow construction an Ohio member of Congress declared that 
he "could not think much of a Constitution that would not stand being dipped 
in fresh water as well as salt..' I fear that Mr. Gladstone's code of morals' on 
this question of protection will not secure much respect in other countries 
so long as it spoils in salt water. 

SHIPPING INTERESTS SHOULD BE PROTECTED. 

It will not escape Mr. Gladstone's keen observation that British interests 
in navigation flourish with less rivalry and have increased in greater propor- 
tion than any other of the great interests of the United Kingdom. I ask his 
candid admission that it is the one interest which England has protected 
steadily and determinedly, regardless of consistency and regardless of ex- 
pense. Nor will Mr. Gladstone fail to note that navigation is the weakest of 
the great interests in the United States, because it is the one which the National 
Government has constantly refused to protect. If since the Civil War the 
United States had spent in protecting her shipping merely the annual inter- 
est on the great sum which Eaa gland has expended to protect her ocean traflic, 
American fleets would now be rivaling the fleets of England, as they rivaled 
them before the war, on every sea where the prospect of commercial gain in- 
vites the American flag. 

The failure of the United States to encourage and establish commercial 
lines of American ships is in strange contrast with the zealous efforts made 
to extend lines of railway inside the country, even to the point of anticipating 
I he real needs of many sections. If all the advances to railway companies, 
together with the outright gifts by towns, cities, counties. States and Nation 
be added together, the money value would not fall short of a thousand mil- 
lions of dollars. No effort seems too' great for our people when the interior of 
the country is to be conected with the seaboard. But when the suggestion 
is made to connect our seaboard with commercial cities of other countries by 
lines of steamships the public mind is at once disturbed by the cry of "sub- 
sidy." We really feel as much afraid of protection at sea as Mr. Gladstone 
is of protection on land. The positions of the American Congress and the 
English Parliament on this subject are precisely reversed. England has never 
t)een affrighted by the word subsidy, and, while we have stood still in potent 
fear, she has taken possession of the seas by the judicious, and even the lav- 
ish, interposition of pecuniary aid. I have already said that the interest on 
the amount which England has paid for this object since she began it with 
great energy fifty years ago would give all the stimulus needed for the rapid 



1 



22 

expansion of our a mraerce. Let it be added that if the Government of the 
United States will for twenty years to come give merely the interest upon 
the interest at the rate of 5 pec cent, on the amount which has been a frea 
gift to railroads, every steam lii e needed on the Atlantic, the Pacific, and 
the Gulf will spring into existence within two years from the passage of the 
act. It is but a few years since Congress twic*j refused to give even $125,000 
per annum to secure an admirable line of steamers from New York to the 
four largest ports of Brazil. And the sum of $125,000 is but the interest upon 
the interest of the interest at 5 per cent, of the gross amount freely given to 
the construction of railroads within the Union. Is it any wonder that 
we have lost all prestige en the sea? 

CANADA'S DEMAND FOR AMERICA'S MANUFACTURES. 

The opposition to the policy of extending our foreign commerce by aiding 
steamship lines with a small sum, just as we have aided internal commerce 
on railroads with a vast sum, originates with the American free trader. Mr. 
Gladstone cannot fail to see how advantageous the success of this free- 
trade effort in the United Ctates must prove to Great Britain. The steady 
argument of the free trader is that if the steamship lines were established, 
we could not increase our trade, because we produce under our protective 
tariff nothing that can compete in neutral markets with articles of the like 
kind from England. How, then, can the free trader explain the fact that a 
long list of articles manufactured in the United States find ready and large 
sale in Canada? The Canadian tariff is the same upon English and American 
goods. Transportation from England to Quebec or Montreal is cheaper than 
from the manufacturing centres of the United States to the same points. 
The difference is not great, but it is in favor of the English shipper acroiss 
the seas, and not the American shipper by railway. It is for the free trader 
to explain why, if the cost of transportation be made the same, the United 
States cannot compete with England in every country in South America in 
all the articles of which we sell a larger amount in" Canada than England 
does. I append a note naming the American articles sold in Canada, and the 
free trader, if candid, will admit that the list is one that is constantly and 
rapidly increasing.* 

* TTie following articles cf American manufacture are sold in Canada 
more largely than like articles of English manufacture: 

Brass goods, copper goods, cordage, ginghams, bottles, flasks, " India-rubber 
goods, printing ink, ingrain carpets, wood manufactures, twines', tinware, 
ship rigging, wall paper, writing paper, envelopes, blank books, strawboard 
paper, boots and shoes, leather and skins, sole leather, leather go<ds, patent 
leather, figured oilcloths, grain drills, harrows, harvesters', hoes, forks, mow- 
ing machines, scythes, spades, shovels, builders' and cabinetmakers' hard- 
ware, house-furnishing hardware, nails, firearms, sewing machines, screws, 
stoves, axes, jewelry (sterling and plated), silverware, lamps, locomotivas, 
hatchets, hammers, saws, mechanics' tools, organs, pianos, "notions," plain 
bouse furniture, especially hotel furniture. 



23 

SOME INTERESTING CENSUS FIGURES. 

Giving heed to the cry of the professional free trader in America, Mr. 
Gladstone feels sure that, though the protected manufacturers in the United 
States may flourish and prosper, they do so at the expense of the farmer, 
who is in exery conceivable form, according to the free-trade dictum, the 
helpless victim of protection. Both Mr. Gladstone and the American free 
trader have, then, the duty of explaining why the argicultural States of the 
West have grown in wealth during the long period of protection at a more 
rapid rate than the manufacturing States of the East. The statement of the 
free trader can be conclusively answered by referring to the census of the 
United States for the year 1860 and also for the year 1880: 

In 1860 eight manufacturing States of the East (the six of New England, 
together with New York and Pennsylvania) returned an aggregate wealth of 
§5,123,000,000. Twenty years afterwards, by the census of 1880, the same 
States returned an aggregate wealth of $16,228,000,000. The rate of increase 
for the twenty years was slightly more than 216 per cent. 

Let us see how the agricultural States fared during this period. By the cen- 
sus of 1860, 8 agricultural States of the West (Illinois, Indiana, Iowa, Kansas, 
Michigan, Minnesota, Nebraska, and Wisconsin) returned an aggregate wealth 
of $2,271,000,000. Twenty years afterwards, by the census of 1880 (protection 
all the while in full force), these same States returned an aggregate wealth of 
$11,268,000,000. The rate of increase for the twenty years was 396 per cent, or 
180 per cent greater than the increase in the 8 manufacturing States of the 
East. 

The case will be equally striking if we take the 15 Southern States that 
were slaveholding in 1860. By the census of that year the aggregate return 
of their property was $6,792,000,000; but $2,000,000,000 was slave property. 
Deducting that, the total property amounted to $4,792,000,000. Their aggre- 
gate return of wealth by the census of 1880 was $8,633,000,000. The rate of 
increase for the twenty years was 80 per cent. Consider that during this pe- 
riod 11 States of the South were impoverished by civil war to an extent far 
greater than any country has been despoiled in the wars of modern Europe; 
consider that the labor system on which previous wealth had been acquired in 
the South was entirely broken up; and yet, at the end of twenty years, the 
Southern States had repaired all their enormous losses and possessed nearly 
double the wealth they had ever known before. Do not these figures incontest- 
ably show that the agricultural sections of the country. West and South, have 
prospered even beyond the manufacturing sections. East and North? And all 
this not merely with protection, but because of protection! 

HOW GREAT FORTUNES ARE ACQUIRED. 

As Mr. Gladstone considers protection immoral, he defines its specific of- 
fense as "robbery." To have been fully equal to the American standard of free- 
trade vituperation, Mr. Gladstone should have denounced our manufacturers as 
"robber barons." This is the current phrase with a class who axe perhaps more 
noisy than numerous. The intention of the phrase is to create popular prejudice 



24 

against American manufacturers as growing rich at the expense of the people. 

This accusation is so persistently repeated that its authors evidently regard it 
as important to their cause. It may perhaps surprise Mr. Gladstone to be told 
that out of the fifty largest fortunes in the United States— those that have ar- 
rested public attention within the last ten years — certainly not more than one 
has been derived from protected manufacturing; and this wac amassed by a 
gentleman of the same Scotch blood with Mr. Gladstone himself. The forty- 
nine other fortunes were acquired from railway and telegraph investments, 
from real-estate investments, from the import and sale of foreign goods, from 
banking, from speculations in the stock market, from fortunate mining invest- 
ments, from patented inventions, and more than one from proprietary medicines. 

It is safe to go even further and state that in the one hundred largest for- 
tunes that have been viewed as such in the past ten years not five have been 
derived from the profits of protected manufactures. Their origin will be found 
in the fields of investment already referred to. Moreover, the fear of the evil 
effect of large fortunes is exaggerated. Fortunes rapidly change. With us 
wealth seldom lasts beyond two generations. There is but one family in the 
United States recognized as possessing large wealth for four consecutive genera- 
cions. When Mr. Jefferson struck the blow that broke down the right of pri- 
mogeniture and destroyed the privilege of entail he swept away the only ground 
apon which wealth can be secured to one family for a long period. The in- 
crease in the number of heirs in successive generations, the rightful assertion 
i)f equality among children of the same parents, the ready destruction of wills 
that depart too far from this principle of right, and, above all, the uncertainty 
and the accidents of investment, scatter fortunes to the wind and give to them 
all the uncertainty that betides human existence. 

In no event can the growth of large fortunes be laid to the charge of the 
protective policy. Protection has proved a distributer of great sums of money; 
not an agency for amrssing it in the hands of a few. The records of our sav- 
mg banks and building associations can be appealed to in support of this state- 
ment. The benefit of protection goes first and last to the men who earn their 
bread in the sweat of their faces. The auspicious and momentous result is 
ihat never before in the history of the world has comfort been enjoyed, education 
acquired, and independence secured by so large a proportion of the total popu- 
lation as in the United States of America, 



Sherman (J. S.) on Banking and Currency. 



sz=>e:e:c23: 



OF 



Hon. James S. Sherman 

OF NEW YORK 

IN THE HOUSE OF REPRESENTATIVES, 

Washington, D. C, 

June 8, 1896, 



BANKING AND CURRENCY. 



WASHINGTON, D. C. 

1S96. 



5HERMAN (J. S.) ON BANKING AND CURRENCY. 

REIVIARKS 

OF 

Hon. JAMES S. SHERMAN 

OF NEW YORK, 

In the House of Representatives, 

Monday, June 8, i8g6. 



Mr. SHERMAN. Mr. Speaker, under the general leave to print which has 
been granted by the House I desire to submit certain facts as to banking and 
currency. 

Metallic money, gold and silver, each has been, ever will be, the base for 
the exchanges of mankind. But as commerce increases, substitutes for these in 
the form of paper, covered or uncovered, have come more and more largely into 
use. Wholly uncovered or fiat money is the dream of the Greenbackers in the 
United Stages and of those similar views under different names in other coun- 
tries; but these have never yet succeeded in changing the preference of the 
peoples of the world for metallic money as the ultimate or redemption money. It 
is, however, fully established that an issue of paper money, each dollar based 
on a metallic dollar deposited in a secure place and obtainable on demand, fur- 
nishes a most desirable medium for the chief purposes of money. 

NATIONAIi VS. STATE CURRENCY. 
In the early days of the Republic we had a national bank issuing paper 
money based on the coin reserve provided by law. When this had been legis- 
lated out of existence by the Democratic party of JaekjBon, the country had to 
fall back on the system of State banks. Thi« policy continued so long as the 
Democratic party was in power, and until 1862, when, under the wise manage- 
ment of the Treasury Department in the hands of Salmon P. Chase, the Repub- 
lican party gave the country the present safe system of national banks. The 
Democratic party is still in favor of a return to the antiquated and dangerous 
method of State banks, disregarding the wonderful changes in the conditions of 
the country since they zeased to exist, and a return of which would cause more 
disaster, if that be possible, than that caused by their bungling with the tariff. 

WHAT STATE BANKING ISSUES MEAN. 
It is well for this generation to consider to what the Democratic party de- 
sires to return. It will be instructive to study the pen picture shown in the re- 
port of the Secretary of the Treasury, Hugh McCullough, made in 1876: 

There were scarcely two States in the Union whose systems were alike. In 
some States banks were chartered with proper restrictions upon their discounts 
and their circulation; in others without any such restrictions. In some there 
was individual liability; in others no liability at all, not even in cases of gross 
mismanagement. In some States the circulation of th^ banks «-was secured par- 
tially, at least, by mortgages and bonds; in others there was no security except 
the capital, which was frequently a myth. In some States banking was a 
monopoly; in others it enjoyed the largest liberty. The consequence was that 



-wre had a bank-note circulation frequently worthless and, when solvent, lacking 
-that uniform value which was needed in business transactions between the citi- 
zens of the different States. It is enough to say that the circulation of the State 
banks was entirely unfitted for a country like ours; that by it the people 
were subjected to enormous losses, and not only in the way of exchanges, but in 
the inability of a great many of the banks to redeem their notes. 

Does this inspire us with a desire to have single States, say Florida, Mis- 
sissippi, Alabama and Arkansas, giving the people of these United States a 
safe circulating medium? 

Yet the platform of the Democratic party adopted at Chicago in 1892 says: 

"We recommend that the prohibitory 10 per cent, tax on State bank issues 
be repealed." 

That is all that is needed to open the flood gates of unlimited paper money 
by every one of the 45 States. It would even allow Arizona and Alaska an 
opportunity to come to our rescue. It would be a sight to plea^ the gods of 
discord and unrest to see the honest farmers and laborers of this country study- 
ing the figures and make-up of Democratic "wild-cat" money printed in far-off 
Alaska, or Utah, Arkansas, or Florida, to see if it was a safe return for their 
wheat or labor. We would, indeed, have back the good old times when the well- 
to-do Michigan farmer, en route to Chicago with S^1500 of this precious State 
money, was put off the train because he did not have the sort of money re- 
quired by the seemingly heartless corporation which placed little trust in the 
promises to pay of any man who set up a money shop in his back yard and peddled 
out his promises to pay with generous hand, but at the time of redemption hied 
himself where the woodbine twineth. 

REPUBIilCAN PAPER MONEY. 

All whose memories reach back to the fall of Sumter know that this 
Democratic money was the only substitute for gold or silver until the Repub- 
lican party came into power in 1861. The first call of the Treasury exhausted 
the specie, and the banks promptly suspended payments. A national currency 
was absolutely indispensable to save the nation. In this, as in every crisis, the 
Republican party met the exigency; legal tender (Treasury notes and green- 
backs) were issued to take the place of the disappearing specie; and a system of 
national banks was devised (the most perfect ever known in this or any other 
country), with their issues secured by a deposit of national ' bonds; the often 
worthless and always unreliable State-bank issues were cleared away by a tax 
of 10 per cent, on their circulation, and, more than all, the revenues necessary 
for maintaining the national life were provided. 

THE NATIONAI. BANKS. 

Unlike the old Government Bank, these were independent of each other, so 
'they could not combine against the "Government or the people. Within safe lim- 
its any number of individuals could associate themselves and issue their notes. 
They were under strict governmental supervision — aye, more, each and every one 
of the bills issued by them was and ever has been worth 100 cents on the dol- 
lar, wherever in all this broad land it may have been issued. Who cares or 
looks to see where the bill ^us devised by the Republican party to help obtain 
funds to preserve the national life was issued unless it be from curiosity? Ore- 
gon or Florida, Maine or Texas, it matters not; they pass current in any bank 
in Chicago, New York, or over the counter of any store in the Union. The farm- 
er of the West, the planter of the South, the laborer wherever he may be, has 
only to note the figures they represent. 

NATIONAIi BANKS HEI.PED RESUMPTION. 

When peace was once more restored this same system aided the Govern- 
ment to resume specie payments and to pay off and fund the national debt in 
bonJs drawing less interest. Of course the Democrats opposed every step; that 



has appeared their main mission in life. Dazed by the popularity of the nation- 
al curreiicy, it plunged into the vagaries of "greenbackism" and denounced the 
"resumption act" of 1875. 

Tlio Democratic party has never forgiven the national banks for helping to 
furnish the sinews of war, and in 1892 laid aside all false pretenses and de- 
manded the unconditional repeal of the only hindrance to the flood of State 
money, the 10 per cent tax on State bank circulation, 

DEMOCRATIC TESTIMONY ON DEMOCRATIC PAPER 

MONEY. 

It is this paper system of extravagant expansion, raising the nominal pri-?e 
of every article far beyond its real value, when compared with the cost of 
similar articles in countries whose circulation is wisely regulated, which has 
prevented us from competing in our own markets with foreign manufac- 
tures, has produced extravagant importations, and has counteracted the 
effect of the large incidental protection afforded to our domestic manufac- 
tures by the present revenue tariff. But for this the branches of our manu- 
factures composed of raw materials, the product of our own country — such 
as cotton, iron and woolen fabrics — would not only have acquired almost 
exclusive possession of the home market, but would have created for them- 
selves a foreign market throughout the world. — Message, December 8, 1857. 

When Congress met in December last the business of the country h&d just 
been crushed by one of those periodical revulsicns which are the inevitable 
consequence of our unsoi.nd and extravagant system of bank credit and in- 
flated currency. With all the elements of national wealth in abundance our 
manufactures were suspended, our useful public and private enterprises 
were arrested, and thousands of laborers were deprived of employment and 
reduced to want.— Message, December 6, 1858. 

It will appear from the report of the Secretary of the Treasury that it :s 
extremely doubtful, to say the least, whelher we shall be able to pass through 
the present and the next fiscal year without providing additional revenue. 
It is now quite evident that the financial necessities of the G-overnment 
will require a modification of the tariff during your present session for the 
purpose of increasing the revenue. — Messages, December 19, 1859, and December 
3, 1860. 

It will be observed that while the President (Buchanan) charges to the ex- 
cessive and insecure State bank issue the chief cause of the panic, he is com- 
pelled to admit that "the revenue tariff" of his party did not produce the requi- 
site revenue, and that the only conservative feature of this tariff was its "in- 
cidental protection" to manufacturers from "our own raw material." Bat the 
chief point here is that no State bank system can have its "circulation wisely 
regulated" and properly secured. Competition between numerous States to se- 
cure the most bank capital, ignorance of the laws which determine commercial 
business, laxity of sentiment in regard to the obligations of debt, desire to favor 
influential private interests, striving after party advantage, and inevitable dif- 
ference of opinion in different States multiply and vitiate these bank systems. 
But with the close of the Buchanan Administration a speedy end was brought 
to this whole business. 

And yet even at this late day, and with the present conditions most decidedly 
opposing such a scheme, they rise up and ask for its restoration. 

NATIONAIi BAI^KS AND REFUNDING THE PUBEIC DEBT, 

Let us see what the bands dii to facilitate tht' tremendous work 
of getting our bonds scaled down from high to low rates of interest. As 
the war was over, the credit of the nation rose so that the Republican party 
nought to reduce the interest rate. In this work they were greatly aided by the 
national banks, as is shown by the following extracts: 

COMPTROEEER OF THE CURRENCY--1879. 

The wisdom of Secretary Chase and the others who, in 1862, advocated 
the establishment of a national banking system was long since recognized by 
those who^ understood the principles which should govern a sound system of 



currency and banking; but in the light of the extraordinary financial opera- 
tions of the Government during the present year the wisdom and the econ- 
omy of the system, both for the Government and the people, are now more 
apparent than ever. 

The refunding of the national debt commenced in 1871, at which time 
the national banks held nearly four hundred millions of the 5 and 6 per cent, 
bonds, and from that date to the present time they have held more than one- 
fifth of the interest-bearing debt of the United States. A large portion of 
the bonds held by them in 1871 bore interest at the rate of 6 per cent. This 
class of bonds has been greatly reduced, and is now less than one-sixth of all the 
bonds pledged for circulation, while more than one-third of the amount consists 
of bonds bearing interest at 4 per cent. 

It is certain that if the national banking system had not existed, and United 
States notes had alone been issued, the refunding operations here described 
and the consequent large reduction of interest upon the public debt would 
not have been possible. 

NATIONAI. BANKS ANO RESUMPTION OF SPECIE 

PAYMENTS. 

The same report of the Comptroller says: 

The resumption act not only fixed the day of resumption, but authorized 
the Secretary, in order to prepare and provide therefor, to use any surplus rev- 
enues not otherwise appropriated, and to issue, sell and dispose of, at not less 
than par in coin, any of the bonds of the United States described in the act 
of July 14, 1870. Under this act the Secretary in 1877 sold at par fifteen 
millions of four-and-a-halfs and twenty-five millions of fours; and in April, 
1878, he sold fifty millions of 4i/^ per cents at a premium of 1% per cent. The 
coin in the Treasury continually increased, so that on the day of redemption 
the Secretary held over one hundred and thirty-five millions ($135,382,639) of 
gold coin and bullion and, in addition, $32,476,095 in silver coin and bullion, 
the gold coin alone being nearly equal to 40 per cent of the United States 
notes then outstanding. 

The banks in the cities of New York and Boston strengthened the hands of 
the Government by their action in October, 1878, an account of which will be 
found in my report for that year. The Assistant Treasurer of the United 
States, at New York, became a member of the clearing house, thus facilitat- 
ing the business of the banks with the Government, and the banks agreed to 
receive United States notes, not only for their ordinary balances, but in pay- 
ment of the interest upon the public debt and of other coin obligations of the 
Government. The banks of the country at the date of resumption held more 
than one-third of the outstanding Treasury notes, but they had so much con- 
fidence in the ability of the Secretary to maintain resumption that none were 
presented to them for redemption. 

The people also, who held more than three millions of the issues of the 
national banks, which issues were based upon the bonds of the nation, pre- 
ferred such notes to coin itself. There was, therefore, no demand for pay- 
ment of the notes of the Government, and the gold coin in the Treasury, which 
amounted to one hundred and thirty-five millions on the day of resumption, 
increased more than thirty-six millions in the next ten months, the amount 
lield on the 1st day of November, 1879, exceeding one hundred and seventy-one 
millions. 

There are victories of peace quite as great as those of war, and these of 
refunding and resumption may safely be classed in the latter list. The national 
banks served a useful purpose in both these instances, and they have never been 
forgiven therefor by the Democratic party. 

PROFITS ON CIRCUEATION OF NATIONAL BANKS. 

In blind hostility to every act of the Republican party Democracy haa 
charged that the national banks, besides having aided in putting down the re- 
"bellion, refunding and resuming specie payments, not to mention tht other fact 
of having furnished the safest and most convenient paper money ever known in 
the world, were sucking the blood out of the people by the immense profits they 
make on their circulation. There is no law or regulation which prohibits Demo- 
crats, or even Populists, if they have the required capital, from entering the sys- 
tem of national banks. Consequently it would seem that, if their charge were 
true, the Republican party had been foolish enough to put a powerful weapon into 
the hands of their enemies. * 

In— S.— B. & C. 



But they make elaborate charges, only to have them disproved, to the effect 
that the circulation feature of the national banks is of immense value to them 
and as a result a great burden to the people. 

AN EXAMPL.E. 

A Democratic Secretary of the Treasury authorizes the following statement 
of the matter, which will be found on page 355 of the Report of the Comptroller 
of the Currency for 1895, Part I : 

Deposit of ^100,000 of bonds, 4 per cents, October 31, 1895: 

Market value, $111,483.70; interest, 4 per cent $4,000.00 

Circulation, 90 per cent. ($90,000), at 6 per cent 5,400.00 

^ Total $9,400.00 

From this deduct— 

Tax $900.00 

Annual cost of redemption 45.00 

Express charges 3.00 

Plates 7.50 

Agents' fees V * .' . 7.00 

Sinking fund 680.60 



Total deductions 1,649.10 



Net receipts ..." $7,750.90 

Interest on cost of bonds 6,689.02 



Profit on circulation $1,061.88 

Percentage, 1.002. 

The above is on a 4 per cent, bond of 1907. On one of the same rate of 
interest, but falling due in 1925, one of those which have been recently issued 
by this administration to meet the current expenses of the Government, the 
net profits are stated as being $855.21, or eight hundred and fifty-five one-thons- 
andths of 1 per cent. 

liESS THAN 1 PER CENT. 

The above figures, which are absolutely correct, show that the maximum 
profit is only a trifle over 1 per cent., and on the extended 4 per cents, less than 
that amount. But there are other provivS^ions of law which national banks must 
observe which reduce even this small profit. For instance, they must keep on 
hand at all times 25 per cent, of their circulation as a lawful redemption fund. 
This would require of the above money $22,500 out of the $90,000 not loan- 
able and bringing in no revenue. Then, too, they cannot keep all their available 
money loaned all the time; there is always a loss between the payment of one 
and the placing of another. 

CIRCUEATION HAS DECREASED. 

The above explains why the actual circulation is so much less than that au- 
thorized by law. The following table exhibits this difference from the date of 
the establishment of the national bank system up to the end of the year 1895: 

Authorized and actual circulation of national banks. 

Year. (Last statement of Authorized cir- 
•year). dilation. 

1863 $6,469,553.70 

1864 78,104,521.80 

1865 . 353,841,485.40 

1866 373,925,132.10 

1867 378.066,073.50 

1868 378.571.059.90 

1869 383.759,235.90 

1870 391,820.403.60 

1871 414,203,297.40 



Actual circu- 


Per 


Number 


lation 


cent. 


of banks. 


Not stated. 




66 


$45,260,504.00 


.579— 


508 


171,321,903.00 


.481— 


1,513 


280,253,818.00 


.749— 


1,644 


293,887,941.00 


777— 


. 1,642 


295,769,489.00 


.781-1- 


1,643 


293,593,645.00 


.765— 


1,617 


296,205.446.00 


.755-1- 


1,648 


318,265,481.00 


.768- 


1,790 



Year. 

1872 


(Last statement of Authorized cir- 
year'^. culation. 
' . . .' 434,345,626.80 


Actual circu- 
lation 
336,289,285.00 
341,320,256.00 
331,193,159.00 
314,979,451.00 
292.011,575.00 
299.240,475.00 
303,324,733.00 
321,949,154.00 
317,484,496.00 
325,018,161.00 
315,230,925.00 
304,994,131.00 
280,197,043.00 
267.430,837.00 
202,078,287.00 
164.904,094.00 
143,549,296.50 
126,039,541.30 
123,038,785.50 
134,792,873.25 
145,669,499.00 
179,973,150.50 
169,337,071.00 
182,481,610.50 


Per 

cent. 
.774- 

.773- 
.742- 
.693- 
.652- 
.696- 
.724- 
.787-i 
.769- 
.775- 
.722- 
.662- 
M4^ 
.561- 
.407- 
.315- 
.268- 
.226- 
.207- 
.220- 
.234- 
.293- 
.282- 
.308- 


Number 
of banks. 
1,940 


1873 


441,239,949.90 


1,976 


1874 


446,222,232.90 


2,027 


1875 


454,917,278.50 


2,08(3 


1876 


447,733,814.40 


2,082 


1877 


429,415,893.90 


2.074 


1878 


418,387,496.40 


2,055 


1879 


409,048,663.50 


2,052 


1880 
1881 
1882 


412,686,076.50 

419,273.851.50 

436.395,142.80 


2,095 
2,1(U 

2.3i).S 


1883 

1884 
1885 
1886 

1887 


460,653,817.50 

471,680,158.50 

476,424,652.50 

495,628.807.50 

522,659,784,978 


2,52:) 
2.t)()4 
2.732 

2,875 
3,070 


1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 


534,463,422,561 

556,056.148,203 

592,089,502.50 

609,621,234.30 

620,728,215.75 

613,631.664.00 

599,643.940.50 

591,421,948,785 


3,151) 
3,326 
3,573 
3,692 
3,784 
3,787 
3,737 
' 3,712 



Note.— The above statement is made from the official report of the Comp- 
troller of the Curerucy for 1895, Part I, pages 521-541. The column headed 
^'Authorized circulation" is computed at 90 per cent, of the actual capital and, 
while not exact— a few banks being limited to 80 per cent,, 75 per cent., and 
60 per cent.— is substantially accurate. The column headed "Actual circulation" 
is copied from the official tables, as also the dates and number of banks. The 
column of per cents has been calculated and any possible errors can be de- 
tected by a division. 

An examination of these figures shows that within three years from their 
organization national banks were circulating 75 per cent, of the full amount 
allowed them by the law; that they never went higher than 78 per cent., in 
1868, and 78.7 per cent., in 1879; that this went down to 65 per cent, in 
1876, fell steadily from 77% per cent, in 1881 to 20.7 per cent, in 1891, and has 
slightly gained since, reaching 30.8 in 18£5. If there were so much money or 
profit in the circulation of their own notes, we may be sure these national 
banks would not have failed to avail themselves of the opportunity to the 
fullest extent. 

PROFITS ARE IN DEPOSITS, NOT CIRCUEATION. 

As has before been shown, the true source of profit in national banks, as 
indeed in all banks, is in the large amount of individual deposits. To induce 
these deposits they must command the confidence of the community. A bank 
Is very much like the Texan's pistol. He did not often need it. Indeed, he went 
many years carrying around at considerable inconvenience a dangerous and 
heavy weapon; but when he did at last need it he needed it badly and at once, 
and he needed a mighty good one. Like the Irishman who wanted his money 
until he found the bank had it and would give to him, we all want to know 
that the particular money we receive for any transaction is good to-day and 
will be good at any time in the future. 



THE VAEUE OF A NAME. 

The very fact that a certain institution is called a "national" bank, and is 
known to be under the regulations of the national banking act and regularly in- 
spected by Government bank examiners who are clothed with authority to 
promptly take charge when conditions require it, is a strong evidence of sound- 
ness and tends to bring to it a larger line of deposits. In this is the chief profit. 



Many a bank with but small capital has deposits very many times that sum, and 
on these makes the difference between the small allowance of interest on depos- 
its and per cent, charged on loans. That the privilege of issuing their own notes 
is not generally a source of profit isi shown by the figures given. 

PROFITS OF IVATIOXAIi BANKS. 

There were, September 1, 1895, 3703 national banks in the United States. 
Of these 589 in the New England States earned, for the half year ended Septem- 
ber 1, 1895, 2.1 per cent, on their capital and surplus; 840 in New York, Penn- 
sylvania and New Jersey earned 2,97 per cent. ; 166 in Delaware, Maryland, Vir- 
ginia, West Virginia and the District of Columbia, 2.94 per cent.; 492 in the 
Southern States, 3.18 per cent.; 753 in Ohio, Indiana, Illinois, Wisconsin and 
Michigan, 2.96 per cent.; 556 in Iowa, Minnesota, Missouri, Kansas and Ne- 
braska, 2.15 per cent. ; 119 in Colorado, Nevada, California, Oregon and Arizona, 
2.44 per cent.; while 188 in the remaining Northwestern States and three Territo- 
ries earned 1 per cent, less than nothing for the time given. Savannah, Ga., 1 
per cent.; St. Paul, Minn,, 0.53 per cent.; Nevada, 0.49 per cent.; South Dakota, 
1.76 per cent.; Washington, 1.55 per cent, and Montana, 5,88 per cent., are all 
minus quantities. In other words, they made nothing; did business for the time 
given at a net loss. The average earnings in all the United States for this period 
was 2.6 per cent. (Report of the Comptroller of the Currency, 1895, Part I, 
pages, 420-423.) 

PROFITS OF STATE BANKS. 

On page 14 of the same report returns from 928 State Banks from 24 States 
for the year ended June 30, 1S95, give an average dividend of 7,2 per cent., or 
■considerably above that earned by the national banks. Evidently banking is not 
the endless picnic which many seem to think; and, more than this, national 
banks are not making more money than State banks, in spite of the wonderful 
privilege they enjoy of issuing their own money. 

HOW MONEY IS ISSUED. 

Let us look into this question of issuing money a little further, so as to dis- 
cover why it seems so fertile a source of invective on the part of those who op- 
pose the national-bank system. It seems very fascinating to the average mind 
that one can sign his own bills and have, back of them, the whole credit of the 
United States. When one comes to look into the conditions they are not all so 
inviting. Uncle Sam hedges this privilege around pretty thoroughly. He says in 
substance that whoever pretends to furnish money to his people must give am- 
ple guaranty that this money shall be good — good not only now and for a few 
months, but good for all time; and so long as the United States lasts it will hold 
&n ample fund with which to redeem any of these bills which the bank does not 
itself take up. It makes no difference whether the bank continues or ceases to 
exist. If it stops it can not get hold of the bonds which it had to deposit before 
it was allowed to issue its own paper until lawful money has been deposited to' 
redeem the last of its bills. Uncle Sam's heartless Treasurer retains these bonds 
or this money regardless of the personnel or politics of the owners. No excuse is 
accepted, and nothing satisfies except the strict compliance with the letter of the 
law, 

STARTING ANi> MANAGING A NATIONAI. BANK. 

But before a bank cashier or president can sit down and sign off his notes 
he has had to do sevei-al things, " He has to associate with him four other per- 
sons, and they together have put up money enough to purchase $100,000, par 
value, of Government bonds. These are still expensive articles to have in the 



9 

liouse, even if they have become rather more plenty since the Cleveland Ad- 
ministration acquired the habit of issuing them for running expenses. In the 
year 1895 this transaction would have required for fours of 1925, $121,752.70. 
On this outlay he will be able to float 90 per cent, of the par value, or $90,- 
000. But he must always keep on hand a reserve of 25 per cent., either in 
this money or in that of those whom he can induce to deposit in his bank. This 
■ calls for $22,500 off, or leaves him a net circulation beyond his own bank of 
$65,500. His association can not do business in their hats; it must have vaults, 
and a safe, and a convenient location for its bank, and these things cost good 
money. He must have a full set of books and a sufficient force of officials and 
clerks to do the business. In our West and Southwest he must also lay in a 
fair supply of firearms with which to discourage those who wish to reach wealth 
by quicker ways than those usually accepted as legitimate. Of late he has to 
do this in other sections also. He has to pay local taxes, a circulation tax of 1 
;per cent., cost of redemption, express, plates, agents, and carry one-tenth of the 
net profits to a sinking fund to be available when needed to make up for bad 
'debts or any other losses. His bank can only charge the legal interest in the 
State where it is located; a violation forfeits the entire interest. He must fur- 
nish reports to the Comptroller when demanded, and from time to time pay the 
-charge fixed by law— $25 and up— to compensate the national-bank examiner 
who comes to check up his cash and see exactly how he is carrying on the 
business. 

No overdraft can be cashed, not even for his best customer, nor can he loan 
to any one person more than a certain portion of the capital. No more real 
estate can be held than is needed for the bank's use, and if any comes in on 
debts it must be disposed of within five years. 

In short, he is so hedged about with restrictions and limitations that his 
bank is safe — the safest in the world. It is just what a bank should be and 
rfills a necessary place in every community. 

WHAT IS A BANK GOOB FOR? 

It is the fashion in these days for certain classes to lay ail monetary ills 
at the door of banks and to declare that we would be better off without any 
banks at all. Well, we could get along without banks, or without hearts 
• either, for awhile — a very short while! As a general proposition we need a heart 
for the gathering up, conservation, and redistribution* of the blood which 
nourishes the body. Unless we have some such organ, without this force, either 
of blood for the individual or of money for the community, we get clogged up, 
and life, individual and financial, comes to an abrupt stop. The safety of the 
community lies in having the banks well regulated, secure as places of deposit, 
furnishing a supply of money to the people which shall have a stable value, and 
finally to have its own, and the funds of those who have deposited with them, to 
loan out to those who may need them in the carrying on of any business. 

WE HAVE PASSED THE STOCKIl^O PERIOO. 

The coffee pot and stocking have ceased to be a safe and useful place for 
the deposit of the people's money. Even the hiding place under the floor or in 
the back yard has come to be more honored in the breach than in the ob- 
servance. Indeed, there are those who declare that such hoarding of money 
is an offense against good morals as well as unsafe. We are 70,000,000 peo- 
ple, and the simultaneous withdrawal of five or ten or a thousand dollars by a 
large number of people would have a serious effect on the supply of money for 
all the people. 

The peasants of Prance still do this, although in smaller proportion each 
year. The poor people of Mexico, who have n? safe banks in which to deposit 
their little savings and a poor money to save, still dig holes in the ground to 



10 

Mde away their hoards; but the people of these United States are not like 
either of these. They possess the intelligence to see that such hoarding is not 
■o^ily unsafe and unprofitable for themselves, but against public policy. 

GOOD BAIVKS ElVCOURAGE THRIFT AND AID BUSINESS. 

The day laborer who saves a few dollars each week can put his money into 
a secure bank where it earns him a small annual interest and is of service to 
others who need it for the time being. The farmer need not hide the surplus 
money from the sale of his crops (indeed, in these good Democratic days he 
has no surplus; his surplus is a deficit); he can deposit it and use it as his needs 
require. If he leaves it long enough he can get interest on his balances. The 
national banking system of the United States is the safest in all the world; 
it can be enlarged and extended to secure wider benefits to all the i>eople. If 
necessary, the Government can guarantee the security of the deposits as well 
as that of the money issued by the banks. The statistics since the establish- 
ment of this system by the Republican party in 1863 show that a small tax on 
all banks would ha-vje been ample to cover such a guaranty against loss on de- 
posits. 

MODIFICATIONS OF BANKING I.AW. 

With the changed conditions due to the lapse of time, some changes are 
now needed to make the national-bank system more perfectly in touch with com- 
mercial needs 

BANKS WITH $35,000 CAPITAE. 

It is posisble to safely reduce the limit of capital to $25,000 for smaller 
towns where so much as $50,000 cannot be conveniently raised or used. These 
should be encouraged, to the end that each community should have its own local 
banks and be more independent of those from a distance. If owned in whole 
or in part at home the management would be directly interested in the develop- 
ment of the place, and thus foster all legitimate home enterprises. 

CIRCUI.ATION TO PAR VAIiUE OF BONDS. 

At present the limit of circulation is 90 per cent, of the par value of the 
Government bonds deposited. We are not likely to run any risk, even should 
the Democracy continue in power another four years — and such a catastrophe 
seems about to be averted by unanimous consent— in allowing the limit to be in- 
creased to 100 cents or to the par value of the national bonds deposited. This 
would tend to encourage the establishment of more national banks and the 
change from private and State to national banks. 

TEMPORARY INCREASE OF CAPITAIi, 

Much is said about the need of an elastic as well as a safe currency. In 
times of financial stringency the need for legal-tender money is greater than in 
good times. It often happens that banks in outlying sections are unable to pro- 
cure from their metropolitan correspondents the actual money needed. This 
may be remedied, in part at least, and with no risk of inflation beyond the 
actual needs of the country, by some such plan as: 

1. Any national bank to have the right to increase temporarily its capital 
and thereby its circulation by remitting to the Treasury or the sub-treasury 
nearest to it Government bonds in any multiple of $1000 as collateral security 
and to receive in return by next mail its own unsigned notes in equal amount. 
2. While such bonds are thus on deposit for such temporary loan the inter- 
est to be forfeited to the Government, and if they are not redeemed within one 
year, then the permanent capital of the bank to be increased to the amount of 
the former and additional capital and the bonds turned into the Treasury for 
.sale. 



11 

3. If within one year the need for temporary increase of circulation ceases, 
the bank to be allowed to deposit lawful money and receive the bonds back 
again, less the interest and such sum as will cover the cost to the Treasury of 
the transaction. 

Among the good results of such a plan would be that any bank holding Gov- 
ernment bonds could within a few days get a supply of ready money without 
being wholly dependent on a distant money center. It would also make the 
bonds worth more at home, because of this provision, than abroad, and tend to 
keep them in this country and avoid the drain of interest to foreign countries 
every three months. 

Indeed, it is possible that by this means some of the long-time, high-rate 
bonds issued by the Cleveland Administration could be refunded into lower 
rate bonds with this circulation feature as an inducement. 

RETIRE Alili SMAIil. OOI.I> COINiS. 

The gold pieces of $2.50, $5, and $10 might be retired and only the twenty- 
dollar piece left for use. For the few who get a gold piece it would be better to 
have the coins of convenient and safe size. The ten-dollar piece is too small for 
either. Then the restriction of pieces of gold coinage would be an economy in 
coinage to the Treasury, while the fact that gold was only usable for coinage 
into twenty-dollar pieces would help to equalize the present disgiarity of values. 
This would be materially aided by the increased use of silver demanded to take 
the place of the one and two dollar bills. 

THE E]HfI>I.ESS CHAIN OF SECRETARY CARIilSEE. 

The threat of the Treasury notes, so graphically portrayed by Mr. Cleve- 
land's Secretary of the Treasury, is due largely to the impecunious condition 
of the Treasury under the reduced revenues provided by the Wilson-Gorman 
tariff bill. When the revenues were ample, as under the Republican protective- 
tariff system, this alleged endless chain did not trouble the country; it did not 
trouble Secretary Windom; we had enough money left over each year to reduce 
the principal and interest of the public debt from fifty to an hundred mil- 
lions. This was done, too, without stinting any proper Tise of money for the ex- 
penses of the Government, No one was then sitting up nights to see how they 
could stave off th-e pension payments from day to day so as to keep the expenses 
down to the meagre measure of the receipts under a Democratic tariff. Public 
works for which money had been appropriated were carried on, not grudgingly, 
as now, but with the idea that the people believed in having those things done, 
and well and promptly done. In those days, when there was plenty of money 
coming into the Treasury from the imposts on foreign goods — when the foreign 
manufacturer was doing his share to support this Government — we were not 
troubled, ae is Secretary Carlisle now, about the Treasury notes. 

STARTING THE ENDEESS CHAIN. 

Any man who attempts to run his business between wind and water, be- 
tween hay and grass, must not be astonished if all the world does not have 
confidence as to his financial standing. In this case we all knew that these 
United States were amply able to pay all bills, but in many well-informed quar- 
ters there was a very robust opinion that the parties at the head of affairs here 
were wholly incompetent to perform their duties. It was this opinion and the 
well-known condition of chronic impecuniosity of the Treasury under the 
Democrats that have set this endless chain so busily at work to plague and 
frighten the Secretary. The Republican party had this chain; it was in position, 
but it did not move; it stood still. It had stood thus so long that people had be- 
gun to think it wae stuck; that in fact it was rusted fast and could not revolve. 



12 

until, lo! Democratic impotence came to its own — came to attempt to direct the 
destinies of this mighty nation — oiled this chain with free trade, hard times, and 
no cash, when all at once it began rapid revolutions. 

Confidence in the engineer, and a full knowledge that sufficient funds are 
to be provided, will "put this wheel to sleep" again, put it into the same state 
of innocuous desuetude in which the Democratic party now languishes. 

TAXES PAID BY NATIONAI. BAll^KS. 

It is often alleged that national banks do not pay their full share of taxes. 
Money hidden in a stocking or buried in the ground cannot well be gotten at 
for taxation, but the capital, deposits, and circulation of a national bank are all 
of record; they cannot be hidden from the assessor, whether for the Govern- 
ment or for local purposes. 

Up to March 3, 1883, they were required to pay a tax on capital and de- 
posits, as well as on circulation. This amounted to — 

Tax on capital (to March 3, 1883) $ 7,855,887.74 

Tax on deposits (to March 3, 1883) 60,940,067.16 

Tax on circulation (to June 30, 1895) 77,539,004.86 

Total $146,334,959.76 

This does not include cost of redemption, of new plates, and examiners' 
fees. 

From 1883 to 1895 the figures show- 
Semi-annual tax on circulation $25,285,486.62" 

Cost of redemption 1,688,523.08 

Cost of plates, new banks 199,610.00 

Cost of plates, extended banks 197,395.00 

Examiners' fees 1,862,415.73 

Total $29,233,430.43 

GOVEKWMENT GUARANTEE OF DEPOSITS. 

From 1863 to 1895 only 303 national banks failed, less than 10 per year— a 
showing never made by any system of banks in the history of the world. Of 
these every one had on deposit bonds with which to rede«m every dollar of their 
outstanding circulation. The total due to depositors by these banks when they 
failed amounted to $94,634,062, and of this the receiver* appointed by the 
Government collected $69,686,616, and have already paid over net to these same 
depositors the sum of $60,314,185. One hundred and forty-nine are still in 
liquidation, so that the present total uncollected of $34,319,877 will be cut down 
probably one-half— say half a million per year. 

The tax on circulation if left as now would be twice as much as would be 
required to absolutely guarantee every depositor from loss. If the tax were re- 
duced one-half it would still be ample for this purpose. 

With such a guaranty every person who deposited any sum whatever in 
any national bank would know that besides the solvency of the bank they had 
the full credit and pledge of the United States that their money would be re- 
paid to them when demanded. Then with national banks in small towns, as 
would be possible with the capital requirement reduced to $25,000, there would 
be within the reach of all the people banks in which they could safely deposit 
their savings and not only receive reasonable interest thereon, but keep it in 
circulation for the benefit of the balance of the people. 



Aldredge on Free Coinage 
of Silver 



FROM REMARKS 

of 



Hon. Donelson Caffery 



OF LOUISIANA 



in the 



Senate of the United States 

WASHINGTON, D. C. 

Friday, January 30, 1896 



Aldredge on Free Coinage of Silver 



FROM REMARKS 

of 



Hon. Donelson Caffery 

OF LOUISIANA 

In the Senate of the United States 

WASHINGTON, D. C. 

Friday, January 30, 1896 



MR. CAFFERY said: 

Mr. President, I have here a speech delivered in Texas by Judge George 
N. Aldredge, and I propose, with the consent of the Senate, to insert it in 
my remarks without reading. 

The PRESIDING OFFICER. If there be no objection, leave will be 
granted. The Chair hears none. 

The matter referred to is as follows: 

SPEECH OF JUDGE GEORGE N. ALDREDGE, OF DALLAS, TEX., ON 
THE FREE COINAGE OF SILVER. 

The proposition that this Government should coin silver for the world, 
in unlimited amount, at double its market value, is so repugnant to the 
common sense of mankind that it ought to be unnecessary to discuss it, 
and would be but for the fact that a portion of our people have been misled 
by appeals to their prejudice and by the specious reasoning of sophists. If 
our Government were asked to declare that 2 quarts equaled a gallon, or 
to revise the multiplication table and enact that 10 times 10 equaled 200, 
all men would see the folly; but when asked to believe that $10 worth of 
silver, by being touched by the Government stamp, instantly becomes worth 
$20, many people honestly believe this miracle may be accomplished, and 
many others affect to believe it for practical purposes. In all ages of the 
world there have been delusions in reference to money, and in spite of uni- 
form disastrous results many are ever ready to listen to the teachings of 
any charlatan who claims that he has discovered a shorter route to wealth. 
They refuse to apply to money that hard common sense which they exercise 
in dealing with the everyday affairs of life. The ignorant have always had 
superstitions about silver. Among the negroes of the South nothing would 
kill a witch but a silver bullet. 

That our ancestors a hundred years ago fixed a unit of value in gold or 
sliver and fixed a ratio between them is immaterial to us. Their example in 



so doing Is not more binding on us than their methods of business, their 
means of transportation, or the implements with which they sowed and 
reaped. It would be a sad commentary upon our intelligence if we had 
learned nothing in a hundred years. We do know that in fixing a ratio they 
attributed no magic to the Government stamp, but sought diligently to as- 
certain the market value of the two metals in the leading nations of the 
world, and conformed, as they thought, strictly to this market ratio. By 
pursuing the method adopted by them we would now fix the ratio at about 
32 to 1. 

The consistent man is not the one who stands in one place always, re- 
gardless of the changing conditions around him, but it is he who, with in- 
telligence and circumspection, ada.pts himself to the changed condition of 
affairs. For nearly twenty years every enlightened nation in the world has 
been on a gold-standard basis. They are all representative governments 
and their laws are made by their people and for their people. The govern- 
ment which first established the gold standard is more obedient to the will 
of its people than ours is. When an important administration measure is 
defeated by the representatives of the English people, the government is 
immediately placed in the hands of the opposition. The gold standard na- 
tions are those that have reclaimed the world from barbarism, and have 
given it all its learning and invention; where schools and churches abound; 
where the dignity of man is maintained and labor properly rewarded; and 
they control the commerce of the world. 

ONLY WEAK AND HELPLESS NATIONS ON A 
SILVER BASIS. 

Thess nations, after testing gold and silver for hundreds of years, vol- 
untarily adopted the gold standard. No nation to-day has the silver stan- 
dard from choice. It is only because they are weak and helpless to remedy 
the evil that any of them remain on a silver basis. But to-day the United 
States, the foremost nation in all the earth in solvency and resources, in 
intelligence and energy, is seriously invited to abandon the standard of civ- 
ilization and commerce and to consort with half-civilized, half-clad people, 
who are weak and ignorant, who have little or no commerce; where bull 
fights abound and schools do not; where human labor is in sharp compe- 
tition with the meek and lowly jackass; where a breech-clout is preferred to 
a full suit, and where the bulk of the people know no more about a stan- 
dard of value than a mule does about the nebular hypothesis. Surely, we 
would do well to take a look at the company before we sit down to the feast. 

The invitation is that this country, after having adjusted its enormous 
business for twenty years to a gold standard, shall suddenly readjust all 
business and all values to what is termed a double standard of gold and sil- 
ver. The arguments advanced in behalf of such a change are: 

First. A double standard resting upon gold and silver would give a 
more correct measure of value and one less liable to fluctuation than a sin- 
gle gold standard. 

Second. Gold has appreciated in value and all property measured by it 
has declined in value. 

Third. The supply of gold is inadequate to make it a safe standard and 
the scarcity of it will tend to the depression of prices. 

Fourth. The free, unlimited coinage of silver at the ratio of 16 to 1 will 
create unlimited demand for silver and restore it to par. 

Fifth. Free and unlimited coinage of silver at 16 to 1 will increase the 
prices of property. 

3 



With reference to the first proposition: A standard of value is some ex- 
act measure which enters into and becomes a part of every contract and to 
which all obligations are referable. If our Government could, by legal en- 
actment, fix the value of gold and silver in the markets of the world and 
could keep them adjusted to a fixed ratio, a double standard would be prac- 
ticable. But it can not fix or maintain value; the buyers of the world — the 
merchants— do that. "When Abraham purchased his lot in Ephron's cemetery 
he weighed out to Ephron silver "current money with the merchant." And 
the merchants of the world have been saying what shall be "current money" 
from that day to this. 

Governments are as powerless to suspend the law of value as they are 
to suspend the law of gravitation. Such being the case, I can conceive of 
two standards, one of gold and the other of silver, and contracts might be 
made referable to either standard; but the indeterminate "double standard, 
resting on two metals, not linked together by any binding obligation, but 
both acting under go-as-you-please rules, is to me absolutely incomprehen- 
sible. We can not bind them together as we do two metals in the pendulum 
of a clock, or in the mainspring of a watch, 

THERE CAN BE NO DOUBLE STANDARD. 

No people ever did business under the imaginary double standard, and 
every attempt to enforce it has resulted in alternating from one standard 
to the other. England tried it for four hundred and seventy years and it 
was an utter failure. France changed her ratio 118 times in twelve years 
trying to walk the double-standard tight rope, "^^e tried it, and went first 
to a silver basis, then to a gold basis, then to a paper basis, and then back 
to a gold basis. The phrase, "double standard," is a contradiction of terms. 
Standard means correct measure, and there can not be two different correct 
measures of value, any more than there can be two different correct 
weights to sell by, two different correct compasses to sail by, or two differ- 
ent correct thermometers to measure temperature hy. If one measure is 
correct, the other can not differ from it and be correct. It is an inexorable 
law of money that when two metals are coined at a fixed ratio and both 
made legal tender, if either is undervalued in the coinage law the under- 
valued metal goes out of circulation. 

About the m^iddle of the fourteenth century Nicholas Oresme, the father 
of finance in France, announced his great law to Charles V; one hundred 
and thirty years later Copernicus, the founder of modern astronomy, an- 
nounced it to the Prussians, and thirty-two years still later Gresham an- 
nounced it to Queen Elizabeth. Macaulay, in his History of England, shows 
how perfectly this law worked in England,and eloquently describes the dire- 
ful consequences. He was describing coins debased by clipping, but still 
legal tender. A coin is just as bad when debased by overvaluation in coin- 
age as when clipped or counterfeited. In the one case the creditor is deceived 
and in the other he is forced. It is simply the difference between theft and 
robbery. The law of money has never failed. We know what will be its 
operation just as we know that the deadliest poison will kill because it al- 
ways has killed. 

The gold-standard advocates believe in gold as a standard with the 
largest possible safe use of silver among the people. The 16 to 1 dreamers 
believe in the so-called double standard and we are driven by this law to 
the use of silver alone. All gold-standard countries use large amounts of 
silver and no silver-standard country uses any gold whatever. As the 
practical question is the use of the metals, it follows that we are the -bi- 
metallists and the 16 to 1 people are the monometallists. Hence, the battle 



that is to be fought to a finish next year is whether we will remain under a 
gold standard with actual bimetallism in use among the people — gold and 
silver circulating freely without discrimination against either; or shall we 
have a so-called double standard at the mints and nowhere else, with silver 
monometallism in actual use? The battle is between substance and shadow, 
between those who want bimetallism in fact and those who want it in 
name only. 

SILVER FRIENDS AND ENEMIES. 

We are the friends of silver money, who would bring to its aid the power 
of the Government to keep it good, and they are its enemies, who, by un- 
limited coinage, would take from it the guaranty of parity by the Govern- 
ment, and thereby degrade it to its market value. Our Government has 
been and is now coining silver at the ratio of 16 to 1. It is enabled to do 
this because under the law it can restrict the amount coined, and being ves- 
ted with this control it undertakes to make every dollar good money. The 
moment the Government loses control of the coinage, confidence in its abil- 
ity to protect the money issued is gone, and a silver dollar then rests on its 
merits and is worth 50 cents. To illustrate: A merchant could very well 
guarantee the expenses of his clerk if he were allowed to control the ex- 
penses, but if the clerk demanded free and unlimited expenses, then the 
merchant would have to "stand from under" and let the expenses take care 
of themselves. 

We hear a great deal of indignant declamation because the Government 
does not pay its "coin" obligations in silver. To maintain the parity between 
gold and silver it is essential that the Government, in receiving its dues and 
paying its debts, must ignore the inferiority of silver, just as a mother pre- 
tends not to see the limp of her lame child. This gives the option of metals 
to the person dealing with the Government, whether as debtor or creditor. 
If the Government should discriminate against silver by refusing to receive 
it for dues or by insisting on paying it instead of gold, that moment the 
parity would be gone and the silver in every man's pocket would be at a 
discount. Its coinage being under the control of the Government, the Gov- 
ernment makes it good at its counter, and this makes it good at every coun- 
ter in the world. 

If there is anything in the double-standard-stability idea we ought to 
work for it for all it is worth. If two metals will fix value better than one, 
then three metals v/ill beat two, and four beat three, and by having eight 
or ten metals in the standard we can anchor it so that it will not crawl" an 
inch in a thousand years. 

The second proposition is that gold has appreciated, and thereby de- 
pressed prices. The same cause operating upon a number of articles will 
produce the same effect in all those not affected by a contravening cause. 
When we contemplate prices we find that since the gold standard was adop- 
ted, February 12, 1873, some articles have declined in value, some have re- 
mained stationary, while some have risen in value; and no contravening 
causes will account for the failure of gold to depress all alike. We find that 
no two articles have declined at the same time or in the same degree, nor 
has any one article remained uniformly depressed. This demonstrates that, 
as to those articles that have declined, no one controlling cause can be as- 
signed as having produced these results. 

WHEAT PRODUCTION DOUBLED SINCE 1873. 

The stock argument of the 16-to-l people is that wheat and cotton have 
declined and they seem to gloat over the fact. I knew an old negro who, 



when asked how he was getting along, always replied, "Poorly, thank God," 
and they are thankful when the country is poorly on wheat and cotton. 
Since 1873 the vast fertile prairies of the Northwest have been turned into 
wheat fields, so that the production of wheat in the United States has been 
doubled since then. The same thing- has been going- on in Russia and South 
America. The wonderful improvements in machinery for harvesting wheat 
and the extension of railroads for transporting it to market gave an im- 
mense impetus to the production of it. A farmer can make more money 
raising it at 50 cents per bushel to-day than he could at $1 per bushel twen- 
ty years ago. 

The result has been that the overproduction of wheat has reduced its 
price, and the gold standard had nothing to do with the reduction. Its price 
is regulated by supply and demand. ILast May a little bug settled down on 
the wheat fields of the Northwest and in one or two weeks ate up one-half 
of the 16 to 1 argument on prices and sent the prices back into the neigh- 
borhood of those of 1873. The old hayseeds, who knecv the habits of the 
chinch bug and the kind of a multiplication table he used in regulating the 
increase in his family, took the trains for Chicago, commenced buying wheat 
and broke all the smartaleks in the city. They may have talked gold-stan- 
dard depression at home, but they put their money on the chinch bug in the 
city and won. 

The caterpillar and bollworm can do the same thing for cotton. I only 
know the chinph bug by reputation, but I am personally acquainted with 
these worms. They are composed of appetite and skin. They do not care a 
tinker's blessing for anybody's standard, and when they invade the cotton 
fields of the South they send the price of cotton up in every mart of the 
world, g-old standard or no gold standard. They have been doing bu&iness 
with us this summer and have moved the price of cotton up 60 per cent. 
This bug and these worms have not many friends, but as sluggers in an ar- 
gument with a 16 to 1 crank they are entitled to the belt. 

Cotton brought ?1 a pound in New York during the war, and 30 or 40 
cents a pound the first year after the war, on account of the four years' 
cotton famine from 1861 to 1865, and it was several years getting down to 
its normal price. The price declined when we made too much of it. The 
largest cotton crop made with slave labor was 4,669,770 bales, and I remem- 
ber it was confidently predicted that no such crop would ever be made with 
free labor. The crop of 1872 was less than 3,000,000 bales, and we gradually 
increased it to a little less than 10,000,000 bales in 1894. India. Egypt and 
Brazil are also raising larger crops of cotton. The immense crop of 1894 
was thrown upon a market illy prepared to receive it. For three years there 
had been less cotton goods consumed than usual, owing to the world-wide 
panic and depression of business following the Baring failure, and these two 
conditions meeting, overproduction and underconsumption, brought cotton 
down to a very low price. 



COMMUNISTIC IDEA OF THE DUTY OF GOVERNMENT. 

Some of the Populists tell us there can not be overproduction until every 
man, woman and child in the world has a rotund stomach and a full suit 
of clothes. This is based upon the communistic idea that it is the duty of 
the Government to take care of every loafer who is too lazy to work for a 
living, and is too contemptible to waste an answer on. If the gold standard 
depressed wheat and cotton, it was surely loaded at both ends, for it has 
shot some things up in price. The corn crop of the United States is mor& 
valuable than both the wheat and cotton crops combined. 



6 



The crop of corn made just preceding the grold standard, in 1872, sold for 
34 cents at gold figures, and the crop of 1894 was worth 45 cents in gold, 
and it has generally been above the 1872 price. The oat crop is about equal 
to the wheat crop; oats were worth 29 cents in 1872 and 32 cents in 1894. 
Fat beef steers were worth $40 in gold in 1872 and $60 in gold in 1895. Hoga 
are worth more now than they were in 1872, and have generally been higher 
than they were then. The farmers' wives get as much in gold now for but- 
ter, chickens and eggs as they did in greenbacks in 1872, and this crop is 
more valuable than the wheat and cotton crops combined. 

Tobacco, potatoes, bacon, hay, coffee, leather, whisky, and a hundred 
other things have not declined in price. The labor crop is equal in value to 
all other crops combined, and it has steadily advanced in price. Land is 
much more valuable in gold now than in 1872, notwithstanding it was de- 
pressed by the panic of 1892 and 1893. The price of wool has declined, but 
the world's production of it since 1872 has doubled and the use of it has 
been partly supplanted by the use of cotton goods. Horses have declined, 
but the railroads, electric cars and bicycles are doing the work they did. 

COST OF PRODUCTION FIXES VALUE. 

The cost of the production of an article fixes its value. This is neces- 
sarily so, because if the profit is large, others will be attracted to the busi- 
ness until the price is brought to its proper level. All articles manufactured 
by machinery have declined in price, for the reason that with each inven- 
tion the cost of producing the article is lessened. Human genius has pro- 
duced more results for cheapening production in the last fifty years than in 
all the ages of the world before that time. These grand triumphs of man 
over matter, instead of showing depression from a standard of value, show 
forth the glory and dignity of the human intellect, and are an unmixed 
blessing to the whole human family. Could anyone outside of a lunatic 
asylum attribute all these diverse and inconsistent movements of prices to 
one cause, and that cause acting evenly and uniformly upon all things alike? 

Interest has declined since 1872 in my part of the country from 3 per 
cent, per month to 6 and 8 per cent, per annum. There is no denying the 
fact that the gold bugs did that. The South and "West 'have saved more on 
the decline of interest than they have lost in the decline in wheat and cot- 
ton. Interest is always low under an honest standard, among an honest 
people, where money is plentiful. It is lower in London than in any other 
spot on the globe, because her standard is stable and her commercial in- 
tegrity has been the care of her statesmen and her people for ages past. 
England's punctuality in meeting her obligations has made London the 
clearing house of the world. 

Tyre was the London of ancient times. Seated on the eastern end of the 
Mediterranean, she reigned queen of commerce for centuries. The scepter 
of commercial greatness passed from her when her own children reared 
Carthage at the other end of that sea. Some three hundred years ago Eng- 
land planted colonies in America, and to-day the United States is England's 
only formidable rival for the commerce of the world. The object lesson of 
ancient history is being repeated. If the insatiable mine owners, by use of 
their millions, and the place-hunting demagogues, by unctuous appeals to 
prejudice, succeed in driving this country from the standard of civilization 
and commerce, the standard that announces integrity at home and inspires 
confidence abroad, to a fiat standard and silver basis, then England will 
have no rival to grapple with her in the marts of the world. 

The third proposition is that the supply of gold is insufficient to ma';e it 



a correct standard, and its scarcity will tend to depress prices. The average 
annual output of gold of the world for the first half of this century, in round 
numbers, was $15,000,000. From 1851 to 1865, covering the gold boom in 
California and Australia, the yearly average was $130,000,000. The output 
for 1893 was $155,000,000, and for 1894 $181,000,000. The birth rate among 
gold-using countries is not increasing, while the production of gold is on the 
increase, as just stated. This answer ought to satisfy even the extreme 16 
to 1 people — the "per capita" Populist — especially in view of the fact that 
improvements in power and machinery are being- applied to the production 
of gold, while the genius of invention finds no inducement offered nor field 
for operation in the population business. 

My next answer is that the more highly enlightened the world becomes, 
and the greater the improvements in business methods, the less necessity 
there is for the use of actual money of any kind. Steam and electricity 
have so knitted civilized people together that they are practically one com- 
munity. Business men speak to each other around the world as if they were 
assembled in the same building. Their business is done on a system of 
credits, without the use of money, except for ultimate settlement. Nor is 
this method confined to business men. It is broadening with the evolution 
of man from a lower to a higher plane of intelligence. 

MAY LIVE WELL WITHOUT HANDLING MONEY. 

A farmer may now live for a whole year on the fat of the land and never 
handle a dollar in money during that time. He .may receive checks for his 
crop, deposit them to his credit with a bank, and draw on the bank for what 
he owes and spends. Neither he nor the men who bought his crop had a 
dollar in the bank. They only had credit there. The bank owns the money 
in its vaults, and its customers simply have the bank's obligation. Bank 
credits perform precisely the same work that gold and silver do, and they 
perform it much' quicker and more conveniently. The Scots are the most 
conservative people in the world, and they have had the best banking sys- 
tem of any people for two hundred years. On a gold reserve of $23,652,000 
they support bank credits to the amount of $448,288,000. The best author- 
ities estimate that only one bill of exchange in five hundred thousand is 
ever paid in money in England. Gold, silver and other money perform 1 per 
cent, of the exchanges in this country, and credits, in the shape of bills, 
notes, checks, etc., do the other 99 per cent. "The business of the world 
could no more be done to-day with gold and silver than its inland transpor- 
tation could be done with ox wagons. 

The 16 to 1 orators, in denouncing the act of 1873. assert that half the 
money of the country was destroyed, and hold out the idea that our money 
has been contracted to that extent. In 1872 our population was 40,596,000, 
and our per capita of money was $18.79. In 1894, after the country had 
been suffering with gold standard for twenty-one years, our population is 
68,275,000 and our per capita of money is $35.44, and we have much better 
money now than we had then. The adoption of the gold standard as a meas- 
ure of value did not increase the demand for gold for use to any great extent. 
Alcohol is the standard for measuring the strength of all spirituous liquors, 
yet that fact has never been found to be very straining on alcohol. 

Fourth proposition, that the free and unlimited coinage of silver at 16 
to 1 would create unlimited demand for silver and restore it to par. How 
the mere coinage of silver can in any way increase its use among the peo- 
ple I am unable to understand. If there was not enough of it for use as 
money and the Government was limiting the coinage of it, and thereby de- 
nying the people the use of it as money, then there would be force in the 

8 



proposition to increase the coinage of silver. But our condition is exactly 
the reverse of that. The amount of coined and uncoined silver in th«> Treas- 
ury is $512,000,000, while the amount in circulation is about $107,000,000. 

To encourage the use of silver by the people the Government exchanges 
coined silver at its mints for gold or legal-tender currency, and pays the 
express charges on the silver to any part of the country. This coined silver 
is all good money. The dollars are legal tender for all debts in any amount, 
and the halves, quarters and dimes are exchangeable, in sums of $20, for 
gold or other legal tenders. Notwithstanding the inducement offered by 
the Government to promote the use of silver, it has hitherto been unable to 
force into circulation more than about one-fifth of its stock on hand. Then 
why all this clamor for more coinage? If a man had five times as much 
blood in his body as liis arteries and veins would circulate and four-fifths of 
it was lying idle around his heart, would anyone say that such a man needed 
a free and unlimited infusion of blood? 

A government can no more induce people to use money they do not want 
than it can induce them to eat what they do not like. The true place of 
silver is as a change money. It is indispensable for that purpose and un- 
suited to any other, and all the silver-tongued orators in the land can not 
change this fact. The $1, $2.50 and $3 gold pieces were too small and were 
unpopular as change money, and the Government stopped the coinage of 
them. On the other hand, silver is not a debt-paying money in any consid- 
erable amount, nor the money of commerce, for the reason that it is too 
bulky and too heavy. When a man gets over $5 or $10 of it, he unloads on 
the first bank he comes to, and the bank unloads on the Treasury. Thus the 
circulation of it is limited to just what the people will use. When the people 
get enough of a thing they know it, and you can not argue with them about 
it. They are gullible on theories, but intensely practical in business. 

NO ** CRIME OF 1873.'* 

We have heard a great deal about demonetization of silver. Let us see 
the extent of "the great crime of 1873." In 1853, in order to prevent the 
subsidiary coin from going abroad, the silver half dollar was reduced in 
weight from 206^ to 192 grains, and the quarters, dimes and 5-cent pieces 
were reduced in the same proportion. These coins were then made a legal 
tender for only $5 in amount, and the coinage of them for private account 
was stopped; but the Government purchased the silver bullion and coined 
them as they were needed. So, no crime was committed in 1873 against the 
halves, quarters, dimes and half dimes. That crime was committed under 
Millard Fillmore. 

In 1879 these coins were made legal tender for sums not exceeding $10. 
In 1873 the standard silver dollar of 412% grains was left out of the coin- 
age act and the trade dollar of 420 grains was substituted for it. This was 
done at the request of the Pacific Slope, to enable our dollar to. compete with 
the Mexican dollar of about that weight in China and Japan. The standard 
dollar was not a legal tender from February 12, 1873, to February 28, 1878, 
at which time its recoinage was provided for and it was reinstated as a 
legal tender for all debts, in whatever amount. But $8,000,000 of this 
"daddy dollar" was coined prior to 1873, out of a total coinage of $1,000,- 
000,000. Jefferson stopped., the coinage of it in 1805, and for thirty years 
not one of them was coined, and the daddies never complained. 

They did not have sense enough to see that Jefferson had sold out to Lom- 
bard street! These dollars were not in fact legal tenders prior to 1S73, be- 
cause the people did not tender them in payment of debts nor in purchase of 
goods. They had not been in circulation since Andrew Jackson was Presi- 
dent, and hardly any middle-aged man had ever seen one of them. The peo- 



pie had demonetized them by melting them down, or by sending them 
abroad for that purpose, and to this good day they have never been de- 
monetized in any other way. The act of 1873 simply recognized what the 
people had done, and for five years continued the policy that the people had 
been pursuing for nearly half a century. The legal-tender faculty of this 
dollar was restored to it seventeen years as'o. 

The Government has $350,000,000 of it on hand now, and has stood ready 
at all times to furnish it to anybody who wanted it. This is the biography 
of the demonetization mouse that has been evolved from a mountain of de- 
nunciation. The poor little thing never lived but five brief years, and has 
been as dead as a doornail for seventeen years. "While it lived it was so 
harmless the people paid no attention to it. Shakespeare says, "The evil 
that men do lives after them." But it is even worse in the case of this 
mouse. The evil that it did not do lives after it in the shape of grasping 
mine owners, two-ply editors and unscrupulous politicians. 

We are told that the standard dollar is not primary money. It is not a 
promise to pay; it is a legal tender for all debts, and it does not have to be 
redeemed in anything on the face of the earth. If any man can give a bet- 
ter definition of primary money than this, I would like to see it. 

This Government is the fast friend of silver money and of the people who 
use it rather than of the American and English corporations who mine sil- 
ver and would coin it at a fictitious valuation. Prior to 1873 this Govern- 
ment coined $144,000,000 of silver; since then, $537,000,000. In twenty-one 
years, under a gold standard, nearly four times as much silver was coined 
as in eighty-one years under the so-called double-standard. A certain kind 
lady always chloroformed her child when she whipped it. Miss Silver was 
assassinated in 1873, at a time when there was almost none of her in circu- 
lation, and since that fatal day she has thrived on assassination and has 
grown from a living skeleton to be the fat woman in the circus. In contem- 
plating her brilliant post-mortem career I am constrained, with the apostle, 
to exclaim, "Oh death, where is thy sting? O grave, where is thy victory?" 

NINETEEN YEARS OF PROSPERITY SINCE 1873. 

After 1873 this country prospered as no other ever did for nineteen years, 
and we are .asked to believe that it took this wide-awake nation nineteen 
years to find out that it was ruined by the legislation of 1873. The negroes 
in some sections believe in a hoodoo charm which is harmless for a year, and 
then suddenly develops insanity, fits, etc. The crime of 1873 seems to have 
worked in a hoodoo way. 

The 16 to 1 people tell us that the coinage of silver will create unlimited 
demand for it. They decline to give us the howness or the whereforeness of 
this newrborn demand, but with childlike faith they expect it to rise in all 
its beauty, as the fabled Venus rose from the froth of the sea. They say the 
demand will come; so the Seventh Day Adventists tell us the end will come, 
and if their picnic comes off first, they will not need silver; the demand will 
be for free and unlimited water. They contend if this Government takes all 
the silver that comes at 16 to 1, silver will be worth par all over the world, 
and they use an egg argument to prove it. 

They say if a merchant advertises that he will pay 25 cents per dozen 
for eggs, so long as he has the ability to take all that comes, eggs will be 
worth 25 cents in all that country. But suppose the merchant did not take 
them? Suppose when a farmer drove up to his store the merchant said 
unto him, "My friend, you have misunderstood me. I am not buying eggs, I 
am simply counting them; certifying that they are good, and handing them 
back to you." What would eggs then be worth? The same old 10 or 15 

10 



eents per dozen. Under unlimited coinag-e the Government would not buy 
silver nor guarantee the value of the coins. It would stamp it "without 
recourse." Silver would come from every country in the world, and the Gov- 
ernment would be a fool to undertake to guarantee the value of the coins 
by trying to preserve the parity between the metals. If a herder drove a lot 
of cow ponies through the mint, and they were branded "$100 horse" and de- 
livered to the owner at the other end of the building, it would not improve 
the breed of the ponies nor create a wild demand for them at the brand 
price. 

Our Government has lost $200,000,000 trying to create demand for silver, 
for the sole and separate use, behoof and benefit of the silver mine owner, 
by buying it when it did not want it and had no need of it; and the silver- 
mining "villain still pursues" it! Uncle Sam has this silver on hand now. 
It would load a two-horse wagon train 173 miles long, putting 1000 pounds 
on each wagon, and letting them occupy 30 feet each in line; and I am mean 
enough to want to see him get even with the game before we start a new 
deal for anybody's benefit. 

If the unlimited coinage of silver by our Government could bring it to 
par, the immediate effect would be to start every mine and mill in the 
world running at its utmost capacity, a large portion of the unemployed 
capital of the world would seek this field, and the bowels of the mountains 
of the earth would be torn asunder to get the benefit of the double price. 
In 1894 $214,000,000 of silver was mined and sold at about 63 cents per 
ounce. If the price was raised to 129 cents per ounce, the 16-to-l price, what 
would the harvest be? The old rule of three will solve the problem. If a 
railway engine will run 90 miles an hour on 63 pounds of steam pressure, 
how fast would it run on 129 pounds of pressure? The blasted thing would 
have to stop once in a while and wait for its shadow to catch up. 

Senator Stewart and his crowd tell us there can be no flood of silver. 
In Noah's time there was a man of sanguine s temperament like that. He 
was standing on the tip end of a high mountain and the waters were lick- 
ing his toes. He hailed Noah and begged to be taken in the ark, but Noah 
had sailing orders from above, and refused to take him aboard. As Noah 
sailed away, he shook his fist at the old man and exclaimed, "Go to the devil 
with your old dugout; it isn't going to be much of a shower, anyway." 

The fifth proposition is that 16 to 1 coinage will increase the prices of 
property. If this Government should open its mints to coinage of the world's 
silver at 16 to 1, we would go at once to silver monometallism. This is the 
voice of all history emphasized by the present status of every free-coinage 
country on the earth. We can no more have bimetallism in actual use and 
unlimited silver coinage than we can have .a square, round object, or dry, 
wet weather. Wherein would the people be benefited if they get double 
prices in half- value m_oney? If farmers' products brought double prices so 
would the manufacturers'. The benefits and advantages would be equal, ex- 
cept that buyers would always deduct enough to safely cover the fluctua- 
tions of silver, and this amount would be a dead loss to producers and a 
premium to speculators. I; knew a boy who sold a cur dog for $100; but he 
took pay in pups at $20 apiece, so he was not materially benefited by the in- 
flated prices. 

INFLATIONIST SCHEME AGAINST THOSE WHO 
LIVE ON SALARIES. 

The inflationists admit that their scheme is against the interest of all 
those who live upon fixed salaries. This includes everyone whose services 
are paid for by the year, month, week or day, from president of a railway 

11 



systam to hod carrier and those who draw pensions from the Government. 
History teaches that wages have never participated in boom prices created 
by debauching- the money of a country. They have remained about the 
same whether paid in good or bad money. The wage earner is a traitor to 
himself and his family when he lets his prejudice lead him to the inflation 
camp, and agrees to take his fixed pay in a depreciated money. If this 16 to 
1 movement should succeed he would find that he had lost all the vantage 
ground for which he and his brethren had struck and struggled for a hun- 
dred years. 

The modicum of prosperity in manufacturing interests in Mexico is based 
on the degradation of their labor. We do not want prosperity at such a 
price, and we are getting it rapidly v/ithout swindling our labor. When the 
laborer prospers he becomes a consumer and his prosperity reacts upon and 
benefits all other interests. In Mexico they have many refined and wealthy 
people, but their laborer is a peon. He gets from 10 to 30 cents per day in 
money worth half its face value. He lives in a miserable mud hut, eats the 
poorest food that will keep his body alive, wears the meanest cloth that will 
hide it, and is even denied the privilege of a gentlemanly jag and has to 
get drunk on cactus juice. In every silver or double-standard country in the 
world the same degradation of labor is apparent. 

We are told that silver is the poor man's money. This appeals to his 
prejudice, and is wholly untrue. Wages are not paid in silver at the end 
of each day, but they are paid by the year, month, or week in currency 
or gold, with just enough silver to make the correct change. The kind of 
money in transit is immaterial so it goes, but when it is hoa-rded, laid by 
for a rainy day, then its staying quality becomes interesting. Tftie rich 
man hoards by investing in property or by depositing in a bank, and the 
bank has the option of paying him in silver, while a large per cent, of the 
poor men patronize the sockleg and the bosom of the earth, and they alwa^ys 
hide gold for two reasons: They have more confidence in its stability, and 
being less bulky it is easier to hide. So these poor men are on a gold bas-is 
and the rich men are on a silver basis, if the banks elect to put them there. 

Prejudice is the curse of this country. It is the only reef in the path 
of our ship of state, the only menace to our experiment of self-government. 
The prejudice of the uninformed makes them the prey of professional agita- 
tors, calamity howlers, and politicians who are an hungered for office. 

The argument is made that we owe so much foreign debt that the in- 
terest is confiscating us. The ablest financiers on this continent, who 
have made the subject a study, place our foreign debt at $2,000,000,000, 
which, as they estimate at a 4% rate of interest, amounts to an annual 
interest account of $90,000,000. 

WE ARE NOT INSOLVENT. 

If we are actually insolvent and can-not pay we ought to make a gen- 
eral assignment for the benefit of all our creditors. That is the way an hon- 
est man does when he fails in business. He does not hide out his property 
and offer 50 cents on the dollar. Instead of being insolvent we are better 
able to pay than any people on the face of the earth. Our national debt 
is, in round numbers, $915,962,000. It has been reduced to one-third its 
former amount. In 1865 it was $2,845,907,000. 

The debt of Great Britain and Ireland (the creditor nation) is $3,350,- 
719,000; the debt of France is $4,446,000,000; Russia. $3,491,000,000; Aus- 
tria-Hungary, $2,866,000,000; Italy, $2,324,000,000; Germany, $1,656,000,- 
000; Spain (with one-fourth of our population), $1,251,000,000. The per cap- 
ita debt of France is $116; of Great Britain and Ireland, $87; Italy, $76; 

12 



^pairi. $73; Russia, $30, while our per capita debt is $14. Uncle Sam, bless 
his old soul, is the only good housekeeper in the whole lot! Our bank de- 
posits amount to $4,000,000,000, while those of all Europe only amount to 
$6,500,000,000. By our last census our per capita of wealth, as shown by 
the assessment rolls, was $341, and the people have never been bad about 
assessing- their property too high. ^ 

The war veterans can not be for repudiation on account of our alleged 
inability to pay. It is a fundamental principle of law and morals that a 
man must be just before he is generous, and that gifts made by an insol- 
vent are void as to creditors. Our Government is giving them about $140,- 
000,000 annually. If we can afford to be liberal we ought to. strain a point 
and be honest, too. If our Government can give it like a prince it ought 
to pay like a gentleman. 

A large part of the debts figured against us are, in fact, not interest- 
bearing debts. They consist of railroad, real estate and other corporation 
debts where defaults were made, and mortgages on. the property have been 
foreclosed, the property sold, and the debts practically extinguished. 

The only debts that the people at large are interested in are the na- 
tional debt and the State debts. The State debts, by the last census, 
amounted to $228,997,387. The county debts amounted to $145,048,045; 
school district debts, $36,701,948, while the debts of cities and towns 
amounted to $724,463,060, making a total of $1,135,210,442. You will ob- 
serve that about three-fourths of this total debt is owed by cities and towns. 
With this borrowed money they have built gas, electric light and water 
works plants, paved their streets, etc. 

Now, the 16 to 1 city man asks his country brother, who uses coal oil 
in his house and darkness outside, who draws his water from a well and 
bathes in the creek, who splits the mud in wet weather and kicks up the 
dust in dry, to help him repudiate the debt incurred by him in getting 
ahead of the countryman as to these comforts and conveniences of life. 
As to all our private domestic debts it is immaterial to the Government 
whether the red-headed men owe the blackheaded ones or the black- 
headed ones owe the red-headed ones. One holds the debt and the other 
holds the property it purchased, and they cancel each other. 

The suggestion is sometimes made that by the enhancement of gold, 
debts have been increased when measured in property, and therefore they 
ought to b3 scaled. I have discussed the gold enhancement theory, but de- 
sire to add that practically all our debts were contracted since the gold 
standard was adopted, and that standard entered into and became a part 
of every contract, and if gold has advanced it would be just as dishonest 
to pay by any other standard as it would be if it had not advanced. If 
a man contract for a thousand bushels of corn it is no. answer to his con- 
tract to say that corn has risen since the contract was made. Besides, all 
our obligations have passed from hand to hand, most of them many times, 
and the present holders had no more to do with the rise or fall of gold 
than they did with the rise or fall of the tides. 

SOCIALISM MEANS REPUDIATION. 

The underlying fructifying element of this 16 to 1 movement is social- 
ism. It is the same old effort to get something for nothing. The Coxey- 
ites wanted grub for nothing. The single-tax cranks want land for noth- 
ing. The Populists want Government monopoly of transportation and pri- 
vate monopoly of the wailing business for nothing. The 16 to 1 people want 
50 per cent, of debts for nothing. The Bellamyites want ever^^'thing for 
nothing. And I might suggest that the new woman wants our bifurcated 

13 



garments for nothing; but that is not pertinent to the subject under discus- 
sion, and I will not do so. 

The movement means repudiation. All else is theory, pretence and 
dreams. It is an effort to pass a left-handed bankrupt bill, not for the 
benefit of the unfortunate debtor who cannot pay, but for the rich as well, 
who can pay, but want to beat their creditors. The poor man is not in 
debt. He never had a chance to get in debt. The corporations, specula- 
tors and plungers generally constitute the debtor class. Every wage earner 
belongs to the creditor class. No one would be benefited by 16 to 1 coin- 
age except the debtor class. Even the mine owner would not, for the tem.- 
porary stimulus given to silver would increase its production until the 
price would fall below what it is now. On the other hand, all would suffer. 

FREE COINAGE BILL WOULD PARALYZE BUSINESS. 

If a bill for free coinage of silver at 16 to 1 were to pass either House 
of Congress, and it was ascertained that it would pass the other House, and 
that the President would sign it, the panic that would ensue would be to that 
of 1S93 what a tornado is to a zephyr. Creditors, to avoid being paid in de- 
based money, would crowd and crush for payment as the people do for exit 
in a theatre on an alarm of fire. Credit and confidence, the twin divinities 
of prosperity, would depart from us. All business would be paralyzed, labor 
unemployed, and despair would hang her black pall in millions of homes, 
only to be lifted when reason resumed her sway. It took France fifty years 
to entirely recover from the John Law fiasco. 

The demagogues, in order to undermine the moral sense of the people and 
make repudiation palatable, rail about England's wealth, and falsely assert 
that she is trying to dictate our monetary system and to crush us. England 
is rich, but if she is trying to ruin us she has a peculiar way of manifesting 
her hostility. For the year ended June 30, 1S91:, she took $423,000,000 of our 
exports, about seven times as much as all the free silver countries in the 
w^orld. We took $107,000,000 of her exports, and she paid us the difference 
In gold or its equivalent. 

Did you ever hear a butcher or a baker or a man with cotton to sell 
complaining that his customers had too much money to spend? Instead 
of trying to drive us to a gold standard it would be immensely to her inter- 
est to have her commercial rival abandon the standard of commerce and 
take a back seat with the half-civilized, non-commercial nations. The ridi- 
culous story of Ernest Seyd was exploded years ago, and though the vase 
was shattered, the scent of that lie hangs 'round the country still. The 
silver-tongued orators still tell the people there was a conspiracy to de- 
monetize silver, although no man has ever been able to call the name of 
a single conspirator. 

In 1873 the motive for demonetizing silver was on the wrong side. 
The silver dollar was then worth nearly 3 cents more than a gold dollar. 
Who at that time could foresee the fall of silver? Our statesmen and 
•financiers are as shrewd as any on earth, and they got no glimpse of the 
coming event. Only to these unnamable conspirators was the revela- 
tion vouchsafed. It seems they had a little Patmos Isle all to them- 
selves, and worked the world on the heavenly tip! 

STANDARD DOLLAR NOT DEMONETIZED. 

Several Congressmen, in the presence of an irate constituency, hav» 
stated they did not know the standard silver dollar w^as being demonetized 
when they voted for the act of 1873. It was read several times in their 

14 



presence. There is no way to make people understand things. They 
mig-ht have been deaf. One all-sufficient reason why they did not so un- 
derstand is that it was not being- done. This dollar was not demonetized, 
but, on the contrary, has been money and good money every day since 
1792. 

England has loaned us money at a lower rate of interest than anybody 
else would. This is the very head and front of all her ofCending, and 
the violent 16 to 1 people want to punch her head for doing this. There 
is an old adage which runs this way: "If you wa,nt to lose a friend, lend 
him money." 

To prove that it is repudiation of debt and not coinage the 16 to 1 
man is after, propose to him free and unlimited coinage without the legal- 
tender attachment. If there is nothing the matter with silver except the 
fact that it is debarred from the mints, then free and unlimited coinage, 
without the legal-tender provision, would set it all right and bring it to 
par. Gold would not suffer by such a test. Your proposition, would nau- 
seate him. Why? Because it is not coinage he is after, but repudiation, 
by means of a legal-tender law. 

They propose two plans for forcing a debased silver standard on the 
country; first, not allow contracts for payment in gold; second, if this 
does not work, then reduce the gold in a gold dollar. With reference to 
the first plan, maintaining the value of money by legal enactment and pen- 
alties has been tried in most countries and has proven an ignominious 
failure in every instance. 

England tried it off and on for nearly five hundred years. France 
tried it for centuries. The North tried it with greenbacks and the South 
tried it with Confederate money. While it was a death penalty in France 
to refuse the assignats, they fell in value until it took $36,000 of them to 
buy one dollar in specie. Eggs must have been worth $500 apiece in 
assignats. What a pity our inflation friends could not have lived there 
and then. A government can rob one part of its people for the benefit 
of the other part as to existing debts, but there its power ends. It cannot 
make its people trade with each other except upon terms satisfactory to 
both parties to the contract. 



CONTRACT RIGHT THE BULWARK OF LIBERTY. 

If the money offered to the seller does not suit him he does not sell. If 
offered to a laborer he would need rest. If offered to a farmer for his pro- 
duce he would only have enough for home consumption, until he found 
a man with better money, and so it would be all along the line. The pro- 
posal to take away the right of contract shows that desperation has 
usurped the seat of reason. We hold all that we do hold by virtue of 
contract right. It is the bulwark of our liberty. It was for this, above all 
things, that Magna Charta was written. When we surrender this supreme 
right we go back to barbarism and become miserable puppets to every mob 
that may seize the helm of State. 

The other method suggested to bring about parity of the metals 
is to reduce the gold in a gold dollar. Our Government has hitherto 
manifested blind, unreasoning prejudice against that kind of statesman- 
ship. Indeed, it has had its deputy marshals busy for a hundred years 
hunting misguided patriots who were trying to take this near cut to 
wealth. If this sort of bill ever passes Congress, I suggest as a rider to the 
bill that all convicted counterfeiters be liberated and given right of action 
against the Government for false imprisonment. All Governments have 



IS 



honored their pioneers, and these men were but the forerunners — the John 
the Baptists of this new relig-ion of debauchment of our monej-. 

EFFECT OF REPUDIATION ON OUR COUNTRY'5 
FUTURE. 

A republic rests entirely upon the morals of its people. The story of 
Washington and his hatchet, told by loving- lips to innocent childhood, has 
made millions of truthful men and women. What would be the effect in this 
country upon unborn generations of a story like this: At the close of the 
nineteenth century the people of the United States became so corrupt they 
repudiated one-half of their debts by paying them in money worth only half 
of its face value? 

An American in a foreign land looks with a swelling heart upon "Old 
Glory" as it proudly flaunts the breeze, the symbol of liberty and honor. 
Pass this act of repudiation and he would look upon it with shame. For 
enthusing purposes we might as well pull it down and run up a dish rag. 

But, Mr. President and gentlemen, allow me in conclusion to say 
that our country is in no danger of repudiation. This 16 to 1 coinage 
clamor is but one of the manifestations of hard times, brought on by the 
late panic. On lowlands in the nighttime, a deadly miasma accumulates, 
but when the bright sun climbs over the hilltops, and shoots his purify- 
ing rays into the bottom, the miasma is dispelled, the atmosphere is sweet- 
ened and made wholesome, and men go forth to their daily avocations with 
assurance of health. 



BABCOCK ON MONEY 



HISTORY 



OF 



MONEY 



AND 



Financial Legislation In the United States. 



SPEECH OF HON. J. W. BABCOCK, 

OF WISCONSIN, 

In the House of Representatives, 

WASHINGTON, D. C 



J896. 



BABCOCK ON MONEY! 



HISTORY OF MONEY 

AND 

Financial Legislation of the United States^ 



SPEECH OF HON. J. W. BABCOCK, 

OF WISCONSIN, 

In the House of Representatives^ 

WASHINGTON, D. C 

May 22, J896. 



Mr. Speaker: Thirty-five years ago the Republican party, confronted by 
the gravest exigency in our national life, originated and adopted a system 
of currency and credit. 

This system was subjected to the severest of all tests— civil war in its 
most tremendous form— but achieved a success and earned a place among 
the monetary systems of the world far greater than any ever instituted by 
any government on the face of the earth. 

THE REPUBLICAN PARTY HAS STEADFASTLY MAINTAINED THE 
HIGH STANDING OF THIS SYSTEM THROUGH ALL THE YEARS OF 
ITS ASCENDANCY; HAS HELD FIRMLY TO AN INTERCHANGEABLE 
CURRENCY BASED UPON COIN, EVERY DOLLAR OF WHICH HAS 
BEEN MAINTAINED AND REDEEMED ACCORDING TO THE ORIGI- 
NAL PLEDGE. 

The same party is to-day, as ever, in favor of the same sound money, and 
will continue to maintain, by prudent legislation, the same wide use of gold, 
silver and paper with profit and security to all the people. 

OUR METAIililC MONEY. 

Under the Confederation of 1778 Congress was given the sole and exclu- 
sive right and power to regulate the alloy and value of the coin struck by 
their own authority, or by that of the respective States, but. having no power 
to enforce its laws in the States, and no revenues with which to carry out 
its own right of coinage, nothing was done. 

Under the Constitution, Congress was given the exclusive power to coin 

3 



money, to regulate the value thereof and of foreign coins. It was expressly 
provided that no State shall coin money, and Congress exercised t-his power 
by the passage of the act of April 2, 1792, establishing a mint and regulating 
the coins of the United States. 

In this act the " dollar " of gold or silver was adopted as the unit money 
of account, with the dollar coin of 371.25 grains of pure silver as the base. 

FROM SIIiTER TO GOIil> BASIS. 

Between 1792 and 1834 we were under a bimetallic system, with the silver 
dollar as the actual unit on a basis of 15 to 1. Spanish dollars until 1816, 
and other foreign coins of both metals until a later date, were also a legal 
tender; but, as our lighter weight silver dollars were exported to the West 
Indies, where they passed at par, we were without a sufficient national cur- 
rency of either or both metals. 

Legislation was therefore necessary, and by the laws of 1834 and 1837 
the weight and fineness of the gold coin— and by the latter act the weight 
and fineness of both coins— were changed so as to make the ratio 16 (15.98) 
to 1, and to establish the double unit, viz: The eagle of gold and the dollar 
of silver. 

COINAGE A]VI> EXPORT OF SII.VER TO 1853. 

This change undervalued silver, as the act of 1792 had undervalued gold; 
and, as a result, silver went out of the United States to countries where it 
was worth more than with us. 

In 1847 our coinage of gold was $20,202,325, which fell to $3,775,513 in 
1848; while silver, in 1847, was $2,374,450, and $2,040,050 iii 1848. 

The effects of the California gold output were felt in 1850 and its coinage 
increased, while that of silver decreased. 

In 1850 the gold coinage was $31,981,739; in 1851, $62,614,493; in 1852, $56- 
846,188; while silver, in 1850, was $1,866,100; in 1851, $774,397, and in 1852, 
$999,410. 

COXDITIOXS IX 1853. 

By 1853 (in spite of an annual coinage of over a million dollars in halves, 
quarters, etc.) there was not enough subsidiary silver for small change, and 
we were on practically a gold basis. By the act of this year the values of 
the minor silver coins were reduced so as to stop their exportation, and what 
was a still more important act, these were made a limited legal tender for 
all amounts not exceeding $5. This was the first step in the impairment of 
the double standard, established by the gold act of 1834. 

CAUSES. 

There were good reasons for this action. Silver was scarce, gold was 
plentiful, and it had been found necessary to coin silver in small denomina- 
tions and with smaller proportionate values than the standard dollars to 
keep them at home for domestic use. 

I1¥CREASEI> GOI.I> OrTPrT. 

The world's supply of gold had suddenly increased because of the Cali- 
fornia and Australian output. Prom an annual product of about $13,482,000 
in the period from 1831 to 1840, it reached $132,500,000 after 1850. The 
natural result was to raise the value of silver and to lower that of gold. 



]¥0 SII.VER IN CIRCUIiATION. 

Then, too, we had no silver dollars in the country, or at least not in suffi- 
cient quantities to figure largely as a circulating medium. We had coined 
none from 1806 to 1836, and from 1836 to 1853 we had only coined of dollars 
1,067,373, all the other silver coinage in this period being of minor money. 

GOI.D THE ACTUAIi STANDARD. 

While, therefore, after 1853, except for the minor coins, the double stand- 
ard was the law, yet the actual condition was that of a single gold standard. 

RESUIMLE. 

Let us briefly review— 

The act of 1792 made the silver dollar the unit, at 15 to 1; those of 1834 
and 1837 changed the ratio to 16 to 1; that of 1853 reduced the values of the 
minor silver coins and limited their legal tender to $5. 

While the acts of 1834 and 1837 made the eagle of gold a co-unit with sil- 
ver, they did not repeal the act of 1792, which based the unit of a bimetallic 
money on the silver dollar. 

But from the causes already named 1853 found us practically with a single 
gold standard, with gold as the cheaper and more plentiful metal. While 
silver dollars were a full legal tender, they were not greatly used, because 
they were usually worth more abroad than at home and were exported. 
Gold was the chief and sole base for coin currency. 

SIIiTER DOIiliARS COINED UP TO 1853. 

We could not, indeed, have had many silver dollars then, because the total 
coinage of these up to 1853 had been only $2,506,890. This condition ob- 
tained until the exigencies of the civil war drove all coin money out and 
gave place to bonds, greenbacks and national-bank notes. 

GOIiD STANDARD INTENDED. 

There is no doubt as to the intention of the lawmakers at that time on 
this point. They were legislating for a single gold standard, although they 
left the silver dollar as a co-unit. That this was the end sought is shown by 
the remarks made by the chairman of the Conrimittee on Ways and Means: 

" We mean to make gold the standard coin, r,Qd make these new coins — 

(The subsidiary silver of proportionately Ic-ss value)— 
applicable and convenient, not for large, but for small transactions." 

Another member of the same committee said: 

*' We have had but a single standard for the last three or four years; that 
has been and now is gold. We propose to let it remain so, to adapt silver to 
it, to regulate it by it." 

In 1861 came the civil war, the tremendous expense account of the Gov- 
ernment, the exhaustion of our current money, and later the issues of paper 
money in Treasury notes and bon€s and national-bank notes. 

HISTORT OF THE ACT OF 1873. 

This act, concerning which so much has been said, was introduced in the 
Senate April 25, 1870; was considered through five sessions of Congress, and 
became a law February 12, 1873. 

5 



IT HAS BEEN CHARGED THAT THIS BILL DEMONETIZED SIL- 
VER, NOT OPENLY, BUT BY MEANS OF AN AMENDMENT NOT 
FULLY KNOWN OR UNDERSTOOD EXCEPT BY A FEW. LET US 
FOLLOW THE COURSE OF THIS BILL. 

THE ORIGINAIi Bllili. 

As originally presented, April 25, 1870, section 14 made the gold dollar of 
25.8 grains the standard of value, the unit of computation. 

Section 15 provided that the weight of the silver coins should be for the 
half dollar 192 grains (the dollar was not mentioned), with proportionate 
values for the quarter, 25-cent piece and dime; and that these should be 
legal tender for $1. 

Section 18 enacted that no coins other than those mentioned (that is, gold 
and minor silver) should be thereafter coined. 

SILVER DOIiliAB. PIECE BISCOXTINIJED. 

On page 11 of the report which ."accompanied this original bill are the fol- 
lowing words: 

" The coinage of the silver dollar piece is discontinued." 
THE DISCONTINUANCE OF THE SILVER DOLLAR PIECE is pointed 
out by the committee three times in other places in this report. IN ALL 
THE DISCUSSIONS AND IN EVERY FORM OF THE BILL THESE TWO 
FEATURES, making the gold dollar the standard unit of value and the 
omission of the silver dollar (of 412l^ grains), REMAIN UNCHANGED. In- 
deed, sections 14 and 18 (afterwards section 17) were never changed, but 
passed absolutely as first presented in the original bill. 

SIIiTEB SECTION. 

Section 15 passed through enough changes to warrant the idea that its 
every provision was understood by all fully. In the Senate it first went 
through unmodified— 36 to 14— (January 10, 1871) SENATOR SHERMAN 
VOTING AGAINST AND SENATOR STEWART, OF NEVADA, VOTING 
FOR IT. 

liEGAIi TEXDEB FIVE DOMiABS. 

In the House Committee this section was amended to make the legal 
tender $5; bat, owing to lack of time, the bill went over. 

On March 9, 1871, Mr. Kelley, in the House, reported the same bill as 
amended by the previous House Committee; that is, with the legal tender 
raised to $5; and, except for the 5-cent piece, it was an exact reproduction of 
the law of 1853. No silver dollars were to be coined, and this minor coin- 
age was to be 'a legal tender for $5 only. 

A 384 GRAIN BOIil^AB. 

In the discussion it was shown that some desired to have a silver dollar 
included, although all agreed that Its legal tender should be limited, and 
that its contents should be not 412Mi grains, but twice that of the proposed 
half dollars, or 384 grains. 

On February 13, 1872, Mr. Hooper reported it back as H. R. 1427, with 
these provisions: 

*• Section 16.— That the silver coins of the United States shall be a dollar, 
a half dollar, a quarter dollar and a 10-cent piece, and that the weight of the 
dollar shall be 384 grains, the half and other coins in proportion, and that 
these shall be legal tender for $5." 

6 



This passed the House May 27, 1872. It will be noted that THIS IS NOT 
THE OLD STANDARD DOLLAR of 412y2 grains, but a subsidiary ©oin for 
change and of limited legal tender. 

TRAI>£ DOIiliAR. 

There were some who desired to attempt a competition in the East Indies 
with the Mexican dollar, and through these the bill was still further modified. 
As it was finally passed, in the Senate January 17, 1873, and House, Feb- 
ruary 7, 1873, the silver clauses were as follows: 

A trade dollar of 420 grains for this export trade, although it was made 
a legal tender and so remained until July 22, 187(>, for $5 at home; a half 
dollar of 12% grams (on the basis of a silver dollar of 386 grains); and minor 
coins of proportionate value. 

All these were made legal tender for |5 only. A 5-cent piece was included 
in the copper amd nickel coins. 

4113 1-3 GRAIN DOI^IiAR IV£:¥£R IN TH£ BII.I.. 

From the foregoing it is plain that the silver dollar of 4121/2 grains, " THE 
DOLLAR OF THE FATHERS," WAS NOT DROPPED OUT SURREPTI- 
TIOUSLY, BECAUSE IT WAS NEVER IN THE BILL TO BE DROPPED 
OUT. No one wanted it there. First they had a half dollar (no dollar), then 
a dollar of 384 grains, then a trade dollar for the Pacific Coast trade to the 
East Indies, and a half dollar of 12^^ grams or 192.9 grains (at the rate of 
386 grains for a dollar), and all this silver was, from first to last, a limited 
legal tender for from one to $5. 

WHY WAS SII.VER DROPPED OUT ? 

In his speech (House, April 9, 1872, Congressional Globe, pages 2306-2308, 
volume 102), one of ten columns, by the way, Mr, Hooper, for the committee 
said: 

SII.VER DOI^IiARS NOT A CIRC€IiATING COIN. 

" Section 16 re-enacts the provisions of the existing laws defining the 
silver coins and their weights, respectively, except in relation to the silver 
dollar, which is reduced in weight from 412i^ to 384 grains, thus making it 
a subsidiary coin in harmony with the silver coins of less denomination to 
secure its concurrent circulation with them. The silver dollar of 4121^ grains, 
by reason of its bullion or intrinsic value being greater than its nominal 
value, long since ceased to be a coin of circulation, and is melted by manu- 
facturers of silverware. It does not circulate now in commercial transac- 
tions with any country, and the convenience of these manufacturers in this 
respect can better be met by supplying small stamped bars of the same 
standard, avoiding the useless expense of coining the dollar for that purpose." 

MRo STOrOHTON SAYS SIIiVER I>OL.IiAR IS TOO 
VAI.IJABI.E. 

On the same day Mr. Stoughton, of Mi«higan, made a speech of seven 
columns, in which he said (same volume, page 2308): 

'* The silver coins provided for are the dollar (384 grains troy) the half dol- 
lar, quarter dollar and dime, of the value and weight of one-half, one-quarter 
and one-tenth of the dollar, respectively; and they are made a legal tender 



for all sums not exceeding $5 at any one payment. The silver dollar as now 
issued is worth for bullion 3^/4 cents more than the gold dollar, and 7i/4 cents 
more than two half dollars; having a greater intrinsic than nominal value, it 
is certain to be withdrawn from circulation whenever we return to specie 
payment, and to be used for only manufacture and exportation as bullion." 

MK. POTTER DECLARES EEGAIi TE?f»ER 
SHOCLI> BE GOEI>. 

Mr. Potter, in discussing this part of the bill, said: 

*• Mr. Speaker, this is a bill of importance. When it was before the 
House in the early part of this session I took some objections to it which I 
am inclined now to think, in view of all the circumstances, were not entirely 
well founded; but after further reflection I am still convinced that it is a 
measure which it is hardly worth while for us to adopt at this time. * * * 
This bill provides for the making of changes in the legal-tender coin of the 
country and for substituting as legal-tender, coin of only one metal, instead,^ 
as heretofore, of two. I think myself this would be a wise provision, and that 
legal-tender coins, except subsidiary coin, should be of gold alone. But why 
should we legislate on this now, when we are not using either of those metals 
as a circulating medium? 

" The bill provides also for a change in respect of the weight and value of 
the silver dollar, which I think is a subject which, when we come to require 
legislation about it at all, will demand at our hands very serious considera- 
tion, and which, as we are not using such coins for circulation now, seems 
at this time to be an unnecessary subject about which to legislate." (Page 
2310, volume 102). 

MR. KEI.EEY FAVORS GOEI> AS STAIVBARI) AXD 
SIEVER AS SUBSIDIARY MO^EY. 

And Mr. Kelley (who is reported as having said afterwards that he " did 
not know that the bill omitted the standard silver dollar ") said on the same 
day (Globe, volume 102, page 2316): 

" I wish to ask the gentleman who has just spoken (Mr. Potter) if he 
knows of any government in the world w^hich makes its subsidiary coinage 
of full value? The silver coin of England is 10 per cent, below the value of 
gold coin, and, acting under the advice of the experts of this country and of 
England and France, Japan has made her silver coinage within the last 
year 12 per cent, below the value of her gold coin, and for this reason it is 
impossible to retain the double standard. The values of gold and silver con- 
tinually fluctuate. You cannot determine this year what will be the rela- 
tive values of gold and silver next year. They were 15 to 1 a short time 
ago; they are 16 to 1 now, 

" Hence all experience has shown that you must have one standard coin 
which shall be a legal tender for all others, and then you may promote your 
domestic convenience by having a subsidiary coinage of silver, which shall 
circulate in all parts of your country as legal tender for a limited amount 
and be redeemable at its face value by your Government. But, sir, I again 
call the attention of the House to the fact that the gentlemen who oppose 
this bill insist upon maintaining a silver dollar worth 3^2 cents more than 
the gold dollar and worth 7 cents more than two half dollars, and that so 
long as those provisions remain you cannot keep silver coin in the country." 

In another place in the same speech Mr, Kelley said: 

" Every coin that is not gold is subsidiary, I repeat it, sir, Byery coin 
tbat IB DQt gold |§ sul)gidiary." 

a 



S£Br4TOR STEWART ]>£€I.AR£S FOR GOI.I>. 

Speaking on another subject a few months afterwards Mr. Stewart, then 
as now, a Senator from Nevada, said (page J392, volume 2, part 2, Con- 
gressional Record): 

"I WANT THE STANDARD GOLD, AND NO PAPER MONEY NOT 
REDEEMABLE IN GOLD." 

About two weeks later, on February 20, 1874, the same gentleman said 
(same volume, page 1677): 

*' By this process we shall come to a specie basis, and when the laboring 
man receives a dollar it will have the purchasing power of a dollar, and 
he will not be called upon to do what is impossible for him or the producing 
classes to do, figure upon the exchanges, figure upon the fluctuations, figure 
upon the gambling in New York; but he will know what his money is worth. 
GOLD IS THE UNIVERSAL STANDARD OF THE WORLD. EVERY^ 
BODY KNOWS WHAT A DOLLAR IN GOLD IS WORTH." 

Thense are the words of Senator Stewart before he became simply the 
representative of a special interest, 

prBiiic BiscrssioN of act of 1873. 

It has been charged that very little was said in the public press about 
this legislation. To this the answer is that in 1873 neither metal was in 
circulation; and it was also simply a reiteration of what had been a commer- 
cial condition for more than twenty years. The bill itself had been before 
Congress three years; its every provision had been fully discussed; it was 
finally passed with only the addition of the trade dollar, and there was not 
much worthy of extended comment. 

THE PROBUCTIOX OF GOIiI> A^D SILVER. 

The legislation of 1853 and 1873 was based on commercial conditions which 
in turn were largely caused by the variation in the output of these two 
metals, both in the United States and in the world. Let us briefly study 
these and see why, from 1853 to 1873, and even for a few years afterwards, 
gold was the more plentiful and cheaper; why later, the price of silver fell 
so that the two were on a parity; why it kept on falling to far below 
this limit, and finally why in recent years the change in the ratio of pro- 
duction has tended and still tends, strongly to induce the belief that a few 
years more will see them near the former parity. 

GOI.I> IN THE UNITED STATES. 

Up to the year 1848 our annual output of gold had never exceeded a 
million, except a trifle in two years. In that year it suddenly rose to ten 
millions (an amount equal to the total annual world product up to 1840); in 
1849 to forty millions; in 1850 to fifty millions, and ranged from that figure 
to sixty-five millions up to 1860. Then for five years it ranged from forty to 
forty-six, and from 1865 to 1870 averaged over fifty millions. For the next 
five years it averaged under forty, to go to fifty-one millions in 1878, and 
ranged from thirty in 1883 to $39,500,000 in 1894. It did not touch the forty- 
million mark after 1871, except $51,200,000 in 1878. The recent increase dates 
from 1892, when it was at the low-water mark of $33,000,000. In 1893 it 
went to $35,900,000. In 1894 it reached $39,500,000. The product of 1895 has 
not yet been stated by the Director of the Mint, from whose report all the 
foregoing figures have been taken, but Mineral Industry, an authority on 
gijcb gulbjects, mil^T date of April 10, 1806^ gives the United States gold pro^ 

8 



duct as $46,830,000, or an incuease of over seven millions. The Director of 
the Mint, under date of April 14, 1895, estimates the 1895 product as about 
$47,060,000, a substantial agreement with the figures^ of Mineral Industry. 

GOIiD IN THE WORIiI>. 

The gold product of the world had averaged for many years before 1840 
a little over ten millions per year. In the ten years from 1841 to 1850 this 
suddenly rose to the then unprecedented figure of $36,393,000. Not content 
with this enormous gain, the next five years, 1851 to 1855, showed a product 
of more than three and a half times as great, $132,513,000, or the immense 
sum of $662,566,000 for the five years. From 1856 to 1860 it averaged $134,- 
083,000; fell off eleven millions in fhe next five years; rose to $129,614,000, 
1866 to 1870; fell to $115,577,000, 1871 to 1875; to $114,585,000, 1876 to 1880, 
and to $99,116,000, 1881 to 1885. This was the gold low-water mark for the 
world for the past forty years. Since that lime it has steadily increased,, 
until for the year 1892 it reached a sum higher than ever before known— to 
the enormous total of $146,815,100. For 1893 there was a further increase of 
nearly eleven millions to $157,287,600, while the amount for 1894 is twenty- 
three millions more— to the vast quantity of $180,626,100. The estimated out- 
put for 1895 is over $203,000,000; that of 1896 nearly if not quite $250,000,000, 
while conservative estimates put the world's gold product within five years 
at $300,000,000 per annum. 

COnVTRIES OF INCREASE. 

It may be well to see whence this great increase has come. It will also 
enable us to estimate as to the future. The principal gold producing coun- 
tries for the year 1894 were, in order and amounts, as follows: 

Australasia $41,760,800 

Africa 40,271,000 

United States 39,500,000 

Russia 24,133,400 

China 8,556,800 

Mexico 4,500,000 

Total from six countries $158,722,000 

Of the above China shows no increase; it and all other nations remain 
about the same, year by year. The recent and future increases are to bo 
found and expected in Africa, Australasia, United States, Russia, and Mex- 
ico. These increases have been as follows: 

1893 over 189 1 over 1895 over 

1893. 1893. 1891* 

United States $2,900,000 $3,545,000 $7,330,200 

Australasia 1,529,600 6,072,200 7,000,000 

Africa 4,711,500 11,328,500 15,000,000 

Mexico 176,100 3,194,700 5.000,000 

Russia 3,000,000 

Increase $9,317,200 $24,140,400 .?37,330,200 

♦Estimated. 
The increase for 1896 over 1895 is estimated by experts to be: United 
States, $10,000,000; Australasia, $10,000,000; Africa, $20,000,000; Mexico, $5,- 
000,000; a total of $45,000,000. r 

10 



SIIiTBR IN THE imiTEO STATES. 

From 1792 to 1834 the product of silver was insignificant; from 1834 to 
1844 it is estimated at a total of $250,000; from 1845 to 1857, both inclusive, 
it is given as $50,000 per year. In 1858 it went to $500,000; in 1859, fell to 
$100,000: 1860, $150,000; in 1861 it rose suddenly to $2,000,000; went to $4,500,- 
000 for 1862; $8,500,000 in 1863; and ranged from eleven millions to sixteen 
millions up to 1871. In that year it reached twenty-three, and varied from 
twenty-eight to forty-eight millions up to 1885. The demonetization took 
place in 1873; resumption and the use of coin money took place in 1876. From 
1874 to 1884 there was only a slight increase, the highest figure, in 1884, be- 
ing $48,800,000. In 1885 it reached $51,600,000; rose to fifty-three in 1887; to 
lifty-nine in 1888; to sixty-four in 1889, and touched seventy millions in 1890. 
In 1891 it went to $75,417,000; in 1892 it reached the high- water mark— the 
highest ever known, and from which it is now steadily receding— $82,101,000, 
only to fall off in 1893 to $77,576,000, and to $64,000,000 in 1894. 

COMPARATIVE INCREASE. 

From 1874 to 1894 silver increased $26,700,000; in the same time gold 
increased a little more than six millions, but there was no appreciable 
increase in silver until 1885. 

SIIiTER IN THE WORLD. 

The annual average coinage value of the silver produced in the world has 
been, from 1545 to 1761, $12,450,000 to $22,162,000. From 1761 to 1860 it 
ranged from $19,144,000 to $37,618,000; 1861 to 1865, it was $45,772,000; 1866 
to 1870, $55,663,000; 1871 to 1875, $81,864,000; while from 1876 to 1880 it 
rose to an annual average of $101,851,000, and 1881 to 1885 to $118,955,000. 

The values for 1886 and 1887 were, respectively, $120,213,611 and $126,- 
095,062. It continued to rise steadily some twelve millions per year to 1893, 
when it was $214,745,300. The year 1894 only showed a slight advance— a 
trifle over two millions for that period. As the output in the United States 
has fallen off thirteen and a half millions from 1893 to 1894, and as the 
same conditions prevail throughout all the precious metal producing coun- 
tries, it is certain that the returns for 1895 will show a falling off of some 
$15,000,000, and that of 1896 of some $25,000,000. 

COINAGE VS. COMMERCIAIi VAI.UE. 

The foregoing figures as to silver, being based on the United States coinage 
value, are not a true guide as to the actual market value. From 1833 to 1850 
the average price of a fine ounce of silver was about $1.31, or 65 pence. In 
1850 and up to 1872 it ranged at about $1.33, or 66 pence, only touching 
$1.36, or 68 pence, in 1859. 

AVERAGE BUM^ION VAtlJE. 

In 1873 the average bullion value of the silver dollar was $l!004, making 
it more valuable than a gold dollar. For 1874 it was $0,988; in 1875, it was 
$0,964; 1876, $0,894; 1877, $0,929, and has not reached the $0.90 mark since. 
In 1886 it got into the seventies, rose to $0.81 in 1890, to fall to $0,764 in 1891, 
to $0,674 in 1892, to $0,603 in 1893, and to $0,491 in 1894. 

1873 ANH 1894. 

In 1873 a silver dollar containing 371.25 grains of pure silver would pur- 
chase only 369.77 grains of the same silver. The coined value was 1% grains 
less than its commercial value. 

11 



In 1894 this same dollar would purchase 756.04 grains, or twice itself and 
5^ grains over. 

THE TURX IK THE TIDE. 

For the ten months (to October 30) of 1895 this average bullion value had 
risen from $0,491 to $0,505. THIS CONSIDERABLE RISE is due to the de- 
crease in the output of white and the increase in that of yellow metal during 
the last two years, an increase that is sure to be continued for the next 
year and to assist in absorbing the surplus of white metal in the world. 

WHY WHITE METAIi FEIil- IN VAI^FE. 

Did silver fall, or did gold get scarcer and grow dearer? We have shown 
that in the United States the gold product held steadily at over thirty and 
(except in 1877-78) under forty millions from 1874 to 1894; that in the world 
for this same period it had steadily increased from $115,577,000 to $180,626,- 
100. Evidently during this period gold did its full duty and earned the 
repute of a metal of stable and sufficient increase in output. 

Silver first came to be a factor in the United States in 1861, when $2,000,- 
000 were produced; in 1864 it was $11,000,000; in 1874, $37,300,000; in 1884, 
$48,800,000, with from fifty-one to eighty-one millions per year thereafter. 

The world product had gone from an annual average coinage value of 
$81,864,000 in 1874 to $118,955,000 in 1884 and $216,892,000 in 1894. 

From 1874 to 1894 silver did not make nearly so great a proprtional gain 
as did gold from 1841-1850 to 1851-1855. 

THE PROPORTIOIV OF METAIiS. 

For 300 years, 1545-1840, during which time Spain had poured the wealth 
of her American silver mines into the markets of the world, the general aver- 
age proportion of the values of the two metals produced had been about 33 
per cent, for gold and 67 per cent, for silver. From the period 1841-1850, up 
to that of 1876-1880, this proportion was about 66 per cent, for gold and 34 
per cent, for silver— much greater than the three-century average; from 1881 
to 1894 gold was still 44 per cent., while for 1894 it was 45.6 per cent. It is 
well to note this average carefully, for, by a strange coincidence, this per 
cent, is exactly the relative proportion of the metallic money of the world 
which gold has furnished in the 400 years since 1493. This gold per cent, will 
be even higher than this average for 1895 and 1896. 

SILVER COINAGE. 

KEI^r-EY-BIiAND Bllil^S. 

In 1876 Mr, Kelley (Pennsylvania) introduced a bill for the coinage of 
standard (412i/^ grains) dollars, and to make them an unlimited legal tender. 
The same year Mr. Bland (Missouri) introduced a bill for the unlimited issue 
of Treasury notes in exchange for gold and silver bullion. 

Both these measures were considered, and in March, 1877, a commission of 
Senators and Representatives made a report on the relations of gold and 
silver. 

The Kelley bill, as modified and championed by Mr. Bland, passed the 
House November 5, 1877. It provided with the Bland amendment, for the 
free and unlimited coinage of 4121^-grain dollars, and made these an unlJm' 
ited legal tender e^^cept wbere otherwise specified by contract 



BliAND-ALI^ISOlV ACT. 

The Kelley-Bland bill was modified in the Senate and became known as 
the Bland-Allison bill. As modified in the Senate and as finally passed it 
restricted the coinage to the 4,000,000 per month which the Secretary of the 
Treasury was to purchase, and it gave to the public Treasury the seigniorage 
or profit on these purchases and coinages. The silver thus to be coined was 
made an unlimited legal tender except for certificates of deposit of gold and 
silver bullion under the act of 1863 and in cases where other money had been 
stipulated by contract. Section 3 authorized the deposit of these dollars and 
the issuance of (silver) certificates therefor. It became a law over the Presi- 
dent's veto February 28, 1878. 

BliAlVD ANI> COl^GER BIIiLS. 

In 1886 Mr. Bland again introduced a bill for the free and unlimited 
coinage of silver — that is, giving to the mine owner and bullion producer the 
whole profit of the seigniorage or difference between the actual cost and the 
legal tender value of the dollar when coined. 

Mr. Conger introduced another bill, embodying the views of Secretary 
Windom, allowing owners of silver to deposit it and receive Treasury notes 
to the amount of its then market value, these to be redeemed when pre- 
sented at its then value. 

THE SHERMAN liAW OF 1890. 

The Conger bill, as modified, was finally passed and became a law July 
14, 1890, and is known as the Sherman law. 

It directed the purchase of $4,500,000 fine ounces of silver each month at 
not to exceed $1 for 371.25 grains of pure silver, and the issue of Treasury 
notes therefor. These notes were to be redeemable on demand, in coin, and 
could be reissued. They were made legal tender for all debts, public or 
private, except where otherwise expressly stipulated, and for customs, taxes, 
etc., and when so received could be reissued. They could also be counted as 
part of the lawful money reserve of national banks. The act further pro- 
vided that upon demand of holder the Secretary of the Treasury should re- 
deem such notes in gold or silver, at his discretion, it being (says the act) 
the established policy of the United States to maintain the two metals on a 
parity with each other upon the present legal ratio or such ratio as may 
be provided by law. 

Section 3 provided for the coinage until July 1, 1891, of $2,000,000 per 
month; after that date as much as needed to redeem Treasury notes issued 
under this act. 

Any gain or seigniorage arising from such coinage was to be accounted for 
and paid into the Treasury. 

WHAT IS GAIN OR SEIGNIORAGE? 

The Bland bill as it passed the House November 5, 1877 (it did not become 
a law), ALLOWED ANY OWNER OF SILVER BULLION TO DEPOSIT 
IT AND RECEIVE FOR EVERY 371.25 GRAINS OF PURE SILVER (4121/2 
GRAINS OF STANDARD SILVER) A COINED DOLLAR which should 
be an unlimited legal tender. He was only to pay the half per cent, mint 
charge for this great privilege. ALL THE PROFIT in this transaction 
WAS TO GO NOT TO THE GOVERNMENT. NOT TO THE PEOPLE 
THROUGH THE GOVERNMENT, BUT TO THE MINE OWNER. THE 

13 



BULLION PRODtJCEIl. In 1886 Mr. Bland introduced another bill with 
the same provisions. Mr. Plumb's amendment to the Conger bill, adopted by 
the Senate June 10, but which also failed to become a law, had the same 
provisions. 

All three of these were in the direct interest and to the sole advantage of 
the mine owners. All profits or gains in the business went not to the Gov- 
ernment to help to lighten the burden of the people, but for the profit and 
gain of a particular class. 

PROFITS OF SEIGI^IORAGF. 

Let us see what these profits were. Under free coinage, on an average in 
1878 bullion worth 89.1 cents when deposited by the mine owner would have 
entitled him to have received from the mint a legal-tender dollar worth 100 
cents in silver or in gold. HE WOULD HAVE MADE A NET PROFIT, 
not counting the small charge for coinage, of 10 CENTS, A PROFIT GAINED 
AT THE EXPENSE OF THE WHOLE PEOPLE. 

In 1886 the same bullion was worth only 76.9 cents, giving to this same 
class a NET PROFIT OF 23 CENTS and making a net cost to all the people 
of 23 cents for the INESTIMABLE PRIVILEGE OP ALLOWING THE 
MINE OWNERS THE CHANCE OF USING THE GOVERNMENT AND 
PEOPLE OF THESE UNITED STATES AS A STALKING HORSE. IT 
WOULD MAKE THEIR DOLLARS CHEAPER TO THE MINE OWNERS, 
OF COURSE. HOW WOULD IT HELP THOSE WHO HAD TO BUY 
THESE SAME SILVJ^R DOLLARS BY THE SWEAT OF THEIR BROWS 
AND AT THE FULL PRICE OF 100 CENTS ON THE DOLLAR? 

Had these provisions, so beneficent to the mine owner, been in operation in 
1894, the dear people would have been giving the mining men a 100-cent dol- 
lar coined from silver bullion which had cost the same mining people just 
49.1 cents. The people of these United States may be lying awake of nights 
sighing for more silver, which, by the way, they will not accept when given 
them if they can help it, preferring the paper equivalent, but they should 
not be compelled to subsidize any class of our citizens, however meritorious 
they may be, to the extent of taking 49 cents worth of silver and stamping it 
a dollar and handing it back to them. This may, indeed, make more money, 
but it makes it into the wrong pockets, into the pockets of the mine owners, 
from which the people will have to get them out by a well-known system of 
purchase at full price. 

WHAT FREE COIXAGE WOUIiD HAVE COST, 

Let us calculate the result of such financial legislation; let us see what 
it would have cost the people of these United States to have given the free 
coinage at the dates stated. 

In 1878 the average cost of silver bullion, enough to make a standard 
silver dollar, was 89 cents. In that year we coined 22,495,550 of these dol- 
lars. At 11 cents on the dollar it would have cost the country just $2,474,- 
511.50 to have thus accommodated the silver-mining interests of the country. 

In 1886 we coined 31,423,880 of these dollars out of bullion which cost only 
77 cents for each coined dollar, and which, had this been done under the free 
coinage provisions, would have cost the people the considerable sum of 
.$7,227,493.78, and which would have been a direct contribution on the part 
of Congress of the public funds to the profits of the silver-producing interests 
of the country. A more monstrous instance of attempted diversion of public 
money was never attempted. 

14 



i'Mfi SH£:itlf AM LAW. 

tinder the operation of the Sherman law of 1890 it was found that the 
Government Mas purchasing 54,000,000 ounces of silver per year, or nearly 
all that was produced in the United States. This silver was stored in the 
Treasury vaults, and Treasury notes issued for the same, which were re- 
deemable in gold on demand. It can be readily seen that it would be only 
a question of time when the Government would be obliged to suspend gold 
payments and reach a silver basis if this was continued. 

R£P£AIi OF TM£ SH£RMAX I.AW. 

At a special session of the Fifty-third Congress, called in August, 1893, 
after a long and spirited debate, the so-called Sherman law, on November 1, 
was repealed. 

AMOUNT OF SII.TER IN USE AS MONEY. 

There is a widespread misunderstanding as to the actual amount of silver 
in use as money by the Government. At the present time there is coined in 
the shape of silver dollars, either in the vaults or in circulation, silver bullion 
deposited to secure Treasury notes, and subsidiary silver, the enormous 
amount of $627,925,632, all of which is in actual use as money. The total 
amount of gold in use in the United States is $618,875,157; of greenbacks, 
$346,681,016. So it will be seen that there is more silver in use than any 
other kind of money, and I believe it would be greatly to the interest of the 
Government and of the people if all paper money under $5 could be retired 
and the silver dollar put in its place to do its work instead of being stored 
in the Government vaults. This is the case in France, Germany and Eng- 
land, where but very little, if any, paper or gold can be found of a less 
denomination than £1 in England, 20 marks in Germany and 20 francs in 
France, practically approximating $5 of American money. 

THE GOVERNMENT DEBT. 

Now, Mr. Speaker, before closing, I wish to call the attention of the 
House to a few hard facts. Under Republican tariff laws, during the period 
from the 1st of September, 1865, up to the time President Cleveland was 
inaugurated in 1893— twenty-seven and one-half years— the Government debt 
and obligations were reduced $1,881,367,873, or an average of $68,632,000 per 
year. The per capita debt in 1865 was $78; in 1893 it had been reduced to 
$12.55. This is certainly a fair showing, for it covers the whole peroid from 
the close of the war until the Democrats secured full control of all branches 
of the Government. Notice the great difference between the financial poli- 
cies of the two parties. Since the 1st of March, 1893, until the 1st of March, 
1896~a period of three years— the interest-bearing debt has increased $262,- 
000,000, or an average of over $87,000,000 per year, against a decrease of 
nearly $69,000,000 per year under a Republican Administration for the pre- 
vious twenty-seven years. 

DEMOCRATIC ADMISSION OF DEFICIENCY. 

Mr. Dockery, an eminent light of Democracy, member of the Committee 
on Appropriations, in the House, April 29, 1896 (Record, page 4971), makes 
the following statement: 

" Mr. Speaker, I desire to make a simple statement to the House. For the 
fiscal year ended June 30, 1894, the revenues of the Government failed U 
meet current expenses by $69,803,260.58. Duriug the last fiscal year the 

15 



current iucome was inadequate to meet current liabilities by $42,805,223.18, 
and it is now estimated that the deficiency in current revenues for the pres- 
ent fiscal year will be not less than $25,000,000." 

These are facts and official figures, and it would seem to me that com- 
ment is unnecessary. 

FREE €OIXAG£ OF SltVFR. 

The time has come. I think, Mr. Speaker, when the Republican party 
should set its face firmly against the free coinage of silver, EXCEPT BY 
INTERNATIONAL AGREEMENT. I have been willing to do all in my 
power TO MAINTAIN AS LARGE AN AMOUNT OF SILVER AS POSSI- 
BLE IN CIRCULATION, and the figures I have given are proof conclusive 
that THE REPUBLICAN PARTY HAS DONE ITS FULL DUTY, and 
reached the limit so far as the free coinage of silver is concerned, and in the 
coming campaign it should be TRUE TO ITS PAST RECORD FOR HON- 
EST MONEY, and give the great financial enterprises and financial insti- 
tutions the stability that can only be reached by a firm declaration against 
a debased currency. UNDER PRESENT CONDITIONS THE OPENING 
OF OUR MINTS TO FREE COINAGE IS AN IMPOSSIBILITY. IT 
MEi^NS RUIN AND BANKRUPTCY TO MANY MILLIONS OF PEOPLE. 

liET THE WIIEEIiS OF PBOGREI^IS MOVE. 

Now, Mr. Speaker, we have but lately witnessed the spectacle of certain 
advocates of free silver in the upper House of this Congress allying with 
Democrats and Populists, and TAKING THE GREAT INDUSTRIAL IN- 
TERESTS OP THIS GREAT COUNTRY BY THE THROAT, and saying to 
70,000,000 people that there shall be no financial legislation, no tariff legis- 
lation, until silver is recognized, or, in other words, UNTIL THE MINTS 
ARE OPENED TO THE FREE COINAGE OF SILVER. There can be but 
one answer, Mr. Speaker, to such a proposition as this, and I believe at the 
polls in the coming election the people will rise in their might and demand 
that the advocates of this interest shall no longer bar the wheels of progress 
or prevent the Fifty-fifth Congress from enacting such wise protective tariff 
laws as will not only furnish ample revenue for the needs of the Govern- 
ment, but protection to all the great agricultural, laboring and industrial 
interests. 

SUMMARY. 

I have endeavored, Mr. Speaker, in these few remarks to give a history 
of the finances of this Government since the war, also showing the produc- 
tion of silver and gold for the past three hundred and fifty years, believing 
that the enormous production of silver during the past ten years has had 
much to do with its present bullion value, and also believing, Mr. Speaker, 
that the great increase in the production of gold and decrease in the pro- 
duction of silver since 1892, if continued for a few years, will do much to 
bring these metals more nearly together in bullion value. 



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tm 9leprafentantenl^aufe, 2Baf[)mgton, S. ®. 



§abcof:k ixb^v Cffiieltr. 



©efc^icfjte be§ @elbe§ unb bcr financteEen 
©efe^geftung in ben 25er. @taaten. 

im D^e^rcifentanteit^aufe ju SSaf^ington, 2). (5:., am 22. 3}Jai 1896» 



SlI^ »cr funfunbbrei§tg 3at)rcn bcr re))uMi'!atttf($ett ^J^vtet btc Bebcututtg^ttotlfle 5lnfe 
unfercr nattonnkn Srijlenj gegeniiber ftanb, enttvtcfelte unb abopHrtc ftc ctn ©vftem ber ^a^' 
lunggmtttel unb bcS bffentlic|jen ^rebi'tg. 

2)tcff^ ©vjiem tojurbe ber fc^werjten ^xnht — ber etneg Siirgcrfrtegeg tn furi^terltd^jlcr 
©eftrtlt — untertt)orfen, aber eg erjtelte (Srfolg unb tocrbtente einen ^Ifl^ unter ben j^inanj- 
©Vpemen ber SBelt toett gropartiger alg trgenb ein anbereg, melc^eg jcmalg »ott trgenb ctner 
anberen Sftcgterung in, bcr iJBclt etngefii^rt tvurbe. 

3n aU ben Sa^rwt t^res @mporfc(itt)uugeg \)at btc republifantf($e ^axki jlcHg ju ber 
<Stanb«rte bicfeg <®9ficm3 ge^altcn ; fie 1;)at an etncm augtaufc|bnren Sourrant, ouf gemunjtcg 
®elb ba[ixt, feji gc^jalten unb iji jeber ©ottar btefeg (Sourrantcg oufre(|t er|)alten unb ctn§elb|l 
Jrorben nac|) bent urfprunglid^ctt 2Serfprcd()ctt, 

3)iefelbe QJartei tfi l^eute, trie fmmer, ju (SJunfien beffctBen guten ©elbcg unb tufrb forts 
faf)ren, burd(> ttjctfe ®efe^gc6ung, ben auggebe^ntepen ®ebrauc^ »on ®olb, ©ilbcr unb ^a^itx- 
gclb jum S3ort|jetl unb jur (5ic|er^ett be^ QSolfeg, aufrec^t ju er^altcm 

Unfer gemiin^te^ @elb. 

Unter ber donfb'beratton »on 1778 n^itlt ber (Xongrc§ ba« aUtinxQtfRi^t unb bic erclujttoe 
®et»aU ben SBert^ bcr, traft [ciner Slutoritat, ober burc^ btc ber re[pefH»cn ©taaten, 
geprcigten ^iinjen, ju bej^tmmen* 

'£)a ber Songrcp abcr ntc^tbte Tla^t bcfa§ bte Slugfiifjrung feiner ©cfe^e tu ben ctttjclnen 
^taaitn ju erjtwingcn, fo gefi^at) ntc^t^. 

Unter bcr Sonjli'tutton hjurbc bem Songreffe bag ougfi^lic§(tc^c 3f{e(|t gcgeben Wlnnitn gu 
jjragen unb ben 2Bert^ berfelben [on^tc ben 2Bcrt^ i)on auglanbifd^en ?!}?unjen in btcfim ?anbc 
JU rcgulirem (5g tourbe pofitw bcflimmt, bap fein (Stnjclj^aat bag Stec^t ^abcn folic G»JcIb ju 
pragen unb ber Songrep ^tbran^it fctn augfc^lte§lid()eg S^iec^t bur(| 9lnnaf)mc beg ®efe^cg 
»om 2. Slpril 1792 jur ©runbung etuer Winx^t unb jur gefifteaung ber ^D^iinjen ber SSer. 
©taaten. 

3n biefcm ©efc^e tourbc ber „T)oUat" aug ®olb ober Stiber alg bic Oclbctn'^eit bet 
fRi^nunQ, mit ber X)oflar=5)'Junxc son 371.25 (5)ran fctneg ©fiber alg 33afig angenommen, 

33on ber mhx'^^a^i§> auf bie @olb=35afi§. 

3tt ben 3al)rcn toon 1792 btg 1834n)aren wtr unter einem bimctantfdKin (S^^jlem mtt bcm 
3ilber*X)ollar alg bie ivtrllic^e (Sinljeit auf etucr 33afig Don 15 ju h ©pauiicbe r^oQarg bii^ 
1816 unb anberefrembc ^JZiinjcn »on beiben ?[l?etallen big ju cincm [pd'tercm Datum, waicu 



ct^fitfan^ ctit pfff|ilt(5e0 3nblntttte!, ba aUv unfcre Icfc^tcrcn (©{Ibcr-ToHard nad^ ®cjl- 
3nMen nu^pefiibrt utib bort ju Part ongenommen wurbcn, ttaren wir balb o^nc einen genugen- 
oen nattonalen Sourrant weber beg etncn nod) bc0 anbcrcn obcr betbcr ^etaUc. 

(go war neuc ©cfe^gebung notbtDettbtg unb burc^ bic ®cfe^c »on 1834 u. 1837 tourbcn bag 
(SjftBt'cbt unb bic j^einbett ber ©olbmiinje — unb burc^ bag Ic^tere (S5efc^ bag ®et»id&t unb btc 
Bcinbcit betbcr 5)?iinjen babin »eranbert, ba§ bag ffiatio 16 (15.98) ju 1 wurbe unb etabltrtcn 
njtr bie boppelte Sintjett, namUc^i ben Sagle (5lbler) aug ®olb unb ben T)o(lar aug filter, 

^rcigung unb 2lu§ful^r Don ©ilber bi0 1853. 

T)tefc 33eranberung erntebriiite ben 5Bertl^ beg (Silberg genau fo toic bag (iJefe^ »on 1792 
ben SScri^ beg ©olbeg erntebrfgt ^atte unb bie i^olqt ba»on ivar, ba§ bag (Silber aug ben 23er. 
(gtaatcn na^i anberen Canbern gtng, wo eg me^r h>ert^ war alg hd ung. 

3n 1847 batte unjerc ©olbpragung ben 2Bert^ »on $20,202,325, toeldpe tn 1848 auf 
^3,775,513 pel. Unfcre ©ilbcrpragung in 1847 betrug S2,374,450 unb in 1848 $2,040,050. 

3^ie golije ber Sntbccfung aon ®olb in (Jatifornta mac^jtc ftd^ fc^on in 1850 merfbar burc^ 
bie erboMc ©olbpraaung unb burc^ bie Slbna^me ber ©itberpraguug. 

3n 1850 pragten air |;31,981,739 in ®oIb, in 1851 ®olb im ffl?crt^e yon $62,614,493 
unb in 1852 fur $56,846,188, bagegen pragten toix in 1850 nur $1,866,100 in <Bi\btx, in 
1851 nur $774,397 unb in 1852 nur $999,410. 

2)ie 3uftanbe in 1853. 

3n 1853 (obgIei«^ toix ia^rlic^ iiber eine 5D?ilIion DoUari in ^alb« unb Stcrtel-Donar- 
pcfcn u. f. ». praatcn) bcfaffcn wtr nic^t geniigenb j^leingelb urn SBec^fel ju mac^en unb wir 
befanben ung praftifc^ auf einer ®oIbbaftg. !Durc^ bag in biefem 3abre ongenommene ®efe0 
wurbe ber 2Ccrt^ ber flcincn ^ilbermiinjen rcbujirt, um beren Slugfuljr ju J)erl?inbern unb tt)ag 
noc^ »iel toicbtigcr war, i\)x Sl)arafter alg gcfc^li(^eg 3<»f)lunggmittel »urbe big ju bent S3etrage 
Don $5 fcjlgefc^t. (Sg tear bieg ber erfte (©d^ritt jum ©c(>abctt ber jDoppcl^aHJa&rung, toelt^e 
burc^ bag ®olb-®e[eg son 1834 etablirt toorben war. 

^ie ©riinbe bafiir. 

@g toaren gutc ©riinbe fiir biefe ^anblung »or^anben. ©ilber war fnapp, ®oIb gab eg tm 
Uebcrflu§, unb fonb man eg not^wenbig (gilber in Hcinen SSetragen unb »cr^altni§ma§igen 
nicbrigen SBcrttie alg bie (©tanbarb-Doflarg ju pragen, um bic (©dj^cibemiinje fiir ben eigenen 
Sebarf im Sanbc gu be^alten. 

5Die er^o^te ©olb^robuftion. 

"Der ^olbttorraf^ ber 2Selt war plo^Ii(ti bur(i^ bie 5^robufHott son Saltfornten unb 
Slufiralicn gcj^icgcn. 23on ciner burc|fc^nittlict> ja^jrltc^cn ^Jrobuftion in ber 3citperiobe 1831 big 
1840 son 113,482,00, fticg fie nat^ 1850 auf $132,500,000. Die naturlicde golge war, bap ber 
aSertl) beg ©ilberg jiieg unb ber teg ®olbeg fiel, 

^ein ©ilber im Umlauf, 

Dap fam nod^, ba§ wir !eine (Silber -DoHarg im Sanbe fatten, ober wenigfieng nid^t in 
geniigenben Quantitaten, um alg Umlaufgmittel in SSetrac^t gejogen werben ju fbnnen. S33ir 
i;atten jwifc^en 1806 unb 1836 feine geprogt unb »on 1836 big 1853 nur 1,067,373 ©tiicf, bie 
ganje anbere ©ilberpragung beftanb in (gc^eibemiinjen. 

@olb unb bie tt)ir!tici^e 2Sa^rung. 

SBal^renb alfo na(| 1853, mtt ber Slugna^me ber ©d^eibemiingen, btc boppcUc SBa^rung 
bic gefe^lic^e war, war bie (SJolbwa^rung ber wirfliclje 3«ii<inb. 



SRefume. 

?aft un^ bit ^ciQt Ut Diitge furj rttcbcr^olftt. Dfl3 ®cfc^ i)on 1792 ntnc&te ben (^ilber- 
dollar bte ©clbcfn^ctt in fRatio »ott 15 ju 1 ; bit ®efe^c son 1834 uub 1837 tteranbcrtc bag 
JRatto auf 16 ju 1 ; bag ®ffe^ »on 1853 scrringertc ben 5Bert^ beg Stlber-^letngclbeg unb 
begrcnjte bepn ^raft ali? gefe^ltc^eg 3^blunggmtttel btg jur ^ot)c ijon |5. 

SBd^renb nun bte ©cfe^e »on 1834 unb 1837 ben (55o(b=Saglc bem ©tIbcr-Doaar alg 
Stnljeit jur (©eitc ftcflten, tourbe baburd^ bag @efc^ son 1792, toelcficg ben ©tlber-Doflar alg 
Si'nt)eit ber !Dop})elwabrung crfc^uf, nic^t totberrufen, 

5lber aug fc^icn angefii^rten ©ritnben fanb ung bag 3al^r 1853 tl)atfad&li(| mtt ei'ner ®oIb- 
nja'brung, mtt ®olb olg bag btQigfle unb metfie 5!J?etaU. Dbglctc^ ©tlbersDolIarg etn wotlgiil- 
h'geg gefe^Itcbcg 3<J^Iun0mtttel tearen, tourben |te nur wentg gebraut^t, ba ftc tm 5luglanbe 
9ctt)ot)nItd> me^r t»ert^ toarcn alg ba^eim unb txpoxtitt tourben. ®olb tear bte einjtge unb 
Daut)tjad^tid()j}e SSajtg unfereg gemiinjten Sourranteg* 

8ilber=®oIIar§ ^cpxag^t bt§ 1853. 

JTbatfod^ItJ^ fonnten t»ir ju ber 3fit nt(^t {m t8cft& »on ijtelcn (5iIber-1)ollarg fein, benn 
bte ©efammtpragung berfclben btg 1853 beltef (t(^ nur auf 2,506,890 ^tucf. I^tcfer ^n^anh 
obtoaltete big bte Umjlanbe beg Surgerfrtegeg unfer ganjeg gemiinjteg ®elb tjertrteben unb an 
oeffen (SteUe Dbligottonen, <B^a^amtinottn (©reenbacfg) unb 5fJattonaUS8anfnoten traten* 

^te @olbtt)a^rung beaSfic^ttgt. 

Ueber bte Wt^t ber ©efe^mad^er ber 3cit/ btefen ^Junft betreffenb, ^errfd^t fetn B^ftfeU 
©te eriicgen ®efe$e fitr bie einfac^e ®olbtt)a^rung, obgtetc^ jte ben (SiIbcr-X)olj(ar afg Wlit^ 
Sin^eit bet'bebielten. X)a§ bteg bte Slbftc^t toav, totrb butc^ bte SScmcrfungen beg SSorfi^cnben 
beg Somiteg fitr Wtttl linb SSe^e bei»iefen. Sr fagte : 

,,2Bir beabpd^ttgen ®oIb bie'^tanbarb-'iB^unje ju ma^tn unb ntac^en btefe neuen 
5Wunicn — 

[bag ©tlbergelb tjon t>er^altni^ma§tg geringcm SBert^e] — 
antoenbbar unb geeignci, ntc^t fitr gro§e fonbern fitr fleine @Jef(i;aftg-3^rangafttonen/' 
Sttt anbereg 5D?ttgltcb beg Somiteg fagte : 

„2Btr ^aben tn ben Ic^ten bret ober titer Snbrcn nur ctne S3nt)rung ge^abt, fie tear 

unb ift ®olb. 2Bir bea bfi^jttgten eg fo ju laffen, (Bilber berfelben anjumeffen unb eg burc^ 

btcfclbc ju regultren". 

3n 1861 fam ber 33itrg?r!rte0, bte rfeftgen 5Iuggaben ber JRcgterung, bag 51uglaufen 

unfereg Sourrant-®eIbeg unb fpater bte 2luggabe Don ^^aptergelb in ©c^a^amtgnoten, 33unbeg- 

Dbligattonen unb 9Jational-33anfnoteiu 

©efc^tc^te be§ ©efefee^ bon 1873. 

Dtefe 5Ifte, iiber twelc^e fo »tel gefprod^en toorben tfJ, tourbe ant 25. Slprtl 1870 tm (Senat 
ftngerci(|t. <Sie twurbe wat)rcnb fiinf ©i^unggperioben beg (Songreffeg bcfproc^cn unb wurbe am 
12. g-ebruar 1873 ®efe^. 

(£g ift be^auptet ttjorben, bn§ burd^ biefeg ®efe$ (Silber cnttt)crtl)et tvurbc, jtuar nidbt btreft, 
fonbern buvc^ ein Slmenbemcnt, toelc^eg nur bon wenigen ric^tig »erftanben tourbe. ^a^t ung 
ben !i!ebenglauf biefer ^iii »erfoIgen. 

^ie urf|)ungnd;e ^Sorlage. 

2Die am 25. Slpril 1870 urfpitnglid^ eingercidjt, niad)tf (Seftion 14 ber SBitt ben ®oIb- 
DoUar son 25.8 ®ran bie 2Dertb'®tanbarb, bie Sinbcit ber $crcc|)nung. 

X)ie 15. <Seftion beftimmte, ba§ bag ®c»icbt fitr bie <Silbcriniinjfn 192 ©ran fitr b^Ibe 
X)oaarg fetn foOte (ber Vi^Ux toai ^at ni(|}| nt«a.|iiO m^ ^cri^aUnipmagigen ^ert^^ fUc ben 



6 

fBmU\ VoUax, bag 25 Sentftucf unb fiir ben X^ime, bag 10 dentprf unb ba§ btefe 5D?uujen 
big jum 58etrac|e son $1 geje^lic^e 3'^()^"n9^5^ttteln fein fodten. 

!5)te 18. ©eftiou ijerfiigte, bn§ fernfrt)tn fcine anbere alg btc ertoa^nten Wlmxitn (b. ^ 
®olb» unb (Stlber-^Uingelb) gcpragt tDcrben [oflten. 

^ag (SiIber=^oIIarftu(J eingeftellt. 

2luf (Setle 11 beg 58ert(^teg, tceld^cr biefc urfpriinglic^e iSorlage beglcttctc, Icfcn toir btc fol= 
Qcnbcn SBortc : 

,,'Die 55raguttg beg (Stlbcr-Donarjiucfcg t'fl etngejlcllt". 

2tn bnt anberen <eteaett beg SBeric^teg mnc^t bag Somite barauf aufnterffam, ba§ bte 
^xdQunQ beg ©ilber-^DoHarg aufljort 3n aflen folgettben IDebattcn unb in aClen 55t)nfen bcr 
23orlage bleiben bt'efe beiben ^unfte, L ber (SoIb^DoUar toirb bte SCert^etn'^ett unb 2. ber ©il' 
ber-3DoC[ar (»on 412J (Sran) wtrb gar nf^it ern)a()nt. 3:|)atfa4jlic^ rourbcn bte ©eftionen 14 
unb 18 nie oeranbert, fcnbern fie tourben angenommen tote urfpriinglic^ gefc^rieben. 

2)ie ©ilBer=(Se!tton. 

X)te 15. ©efticn tourbe fo titelen 33eranberungen unterttjorfen, um ®runb fiir bte 3bee ^\i 
geben, ba§ audj jebe ein^elne 58epimmung »on Setcrmann scrftanben fei. ^m (Senat palTt te 
biefe ©eftion jucrft unb jn>ar uuDerantevt mit 36 gegcn 14 ©timmen (am UK 3anuar 18.71). 
(Senator (Sherman tn ber S^legatisjc unb (Senator <Stei»art 
toon 5^eoaba bafiir, 

giinf ^ollarg ha§> gefefelid^e S^i^'t^ttitteL 

5m Somite beg ^aufeg tourbe biefe (Seftion ba^in amenbirt, ba§ Stiber bi^ ju ^5 im 
23etrag tin gefe^lic^eg 3fll'IwitteI tourbe, ba eg aber an ^tit mangelte, tourbe bie'Stfte big auf 
SSeitereg »erf(^oben. 

2lm 9, ^arj 1871, tm 3^f|)ra)entanten'()aufe tourbe bicfelbe ?Ifte, toie »on bem juftanbigen 
Somite beg sorigen Songreffeg amenbiit, sou i^errn ^eflet^ n^ieber etnberic^tet, bag l)ei§t, bie 
gefe^lid^e 3(^l)ifraft begSilberg »urbe auf ^5 erbot)t unb mit SJlu^naljmc ber 5 Sent=(Sfucfe njar 
nun bie 5lfte eine gfnauc Sopie beg ©cfe^eg »on 1853. \^etnc eilber-roQarg fotUen gepra,it 
n^erben unb biefeg plberne ^leingelb folltc nur bi€ jum 33etrage oon $5 gefe^lic|)eg 3at)lmittEl 
fettt, 

©in 384 ©ran £)oEar. 

3tt ber Debatte jei'gtc eg flc^, ba§ me^rere ^erren ebenfadg etnen (5iIber-X)otIar toiinfc^ten 
aber aUt waren ber 5lnjid^t, ba§ bie gefe^lic^e 3a()lfraft beffelben begrenjt fein miiffe unb ba§ 
beren 3n^alt nic^t aug 412| ©ran fonbern aug bem boppeltcn beg uorgefd^Iagenen ^alben 
©oUarg ober aug 384 ®ran bej^e^en foUe. 

2lm 13. gebruar 1872 njurbe bie 33orIagc alg ^aug-Sia ^o. 1427 soon ^txxn hooper 
juriicfberic^tet mit ber folgenben Seftimmung:— 

„(Sec. 16. jDaf bie (Silber-^iinjen ber ^eretnigten (©taaten be)le^cn foHcn aug eincm 
Dollar, einem ^alben Dollar, einem oiertel Doflar unb einem 10 Sent=Stiicfe unb ba§ bag 
®ctoi($t beg DeHarg 384 ®ran fein foU, ber l)albc unb bie anberen Mmim im S3erl;aUnip 
unb fetlen biefelben gefe^lie^eg 3al)lmittel hii ju $5 fein.'' 

t)iti tourbe »om C^aufe am 27. ^ai 1872 angenommen. Sg tfl ^ier ju bemerfen, ba§ 
bieg ni(^t ber a 1 1 e (S t a n b a r b - D o 11 a r »on 412J ®ran ©etoti^t t»ar, fonbern ^lein= 
gelb liir SBetlfel unb mit bejc^ranlter 3a|lfraft. 

5Der Xxah^ (§anbel§) dollar. 

(£g gab audp 3}?anner, toeldpe eg njiinfc^ten, in Dfl=3nbten mit bem merifanif4)ett DoUar 



fit Somtjctfh'ptt ^tt trctctt unb burc^ ben Stnflu§ biefer ^errcit hjurbc bte SSorkgc tDctterlitn 
amenbtrt. ®te fie nun fclilte^'td) aturnommcn wurbe I'm ©enat am 17» 3finuar 1873 unb 
im 3^epra|entanten()aufe am 7. gebruar 1873 ba lauteten bie (Stlber-Scj^fmmungen toie folat: 

„<imn Srabc G^anbcl^) DoUar fur btefen 2lu5fuf)r'^anbel son 420 ©ran unb (obglfi.b 
biefer 3Doflar etn gefc^Iic^eg 3at)lmiticl m jum 22. 3ult 1876 biteb) fiir S5 ba^cim ; fin 
^alber Dollar mtt bem (Bmi^t »on 12i Oram (auf bcr i8aft3 etneS (Silbcr-Dollar^ »on 386 
©ran) unb @(^eibemiinjen in i3ert)altni§magigem S3ertt)e/' 

Stlle biefe hjurben nur bi« jum 33ftra9e »on $5 geje^ltc^c^ 3al^ImtttcI Uttb tourbc tin 
5 Sent-^tiicf ben ^Itcfel- unb 5lupfer-?[Riinjen betgegeben. 

®er 41 2 J ©ran dollar mar nie in ber 93iII. 

5lu3 bem 35orl)erge!)enben tji eg Har, ba§ ber ©tIber=DoIlar ijon 412i ®ran ©clijlcbt 
,. ber Dollar ber Skater" ntc ge^eim nipooll fallen geloffen to urbe, 
aug bem einfac^en ®runbe, wetl cr nte tn ber 350 r I age cr»aMt 
hjurbe, um fallen gelaffen loerbcn ju fiinnen'^ ^Ztemanb toolUc i^n in bcr 
58i(l ()aben. ^ntxii \)atten fie etnen Ijalben Dollar (feinen Dollar); bann einen Dollar 6on 384 
®ran, nac|l)er einen Slrabe Dollar fiir ben aftatifi^en ^anbel mtt unferer ^actfic-iTii|ie unb 
einem l)albcn Dollar tm ©enjic^t oon 12^ ©ram ober 193 ©ran (auf ber SajtS son 386 ©ran 
auf ben Dollar unb alleg bteg ©ilber son 5lnfang big ju (Snbe war nur gcfe^lii^eg 3<i^^i«ittd 
son einem Dollar l^inauf hi^ ju fiinf Dollar^, 

SSarum tt)urbe ©ilSer fallen gelaffen ? 

3n fetner fRtht (im 5Reprafentanten^aufe am 9. 5Tpril 1872, berii^tet tm dongreffional 
©lobe, 33anb 102, ©eikn 2306—2308) nebenbei etne 0lebe, toeld^e je^n ©palten fUatc, fagte 
|>err hooper im 5luftrage beg juftanbigen (Jomiteg: 

6tlber=®oIIar§ !eine circulirenbe 9Jlunge. 

„Die 16. (©e!t{on macbt nur bie Seftimmungen ber eriftirenben ©eje^e, betreffg bcr ©ilber- 
5)?itnjen nnb beren ©ett)ic|t toieber rec^tgfraftig mil 5lugnal)me beg ©ilber-DoQarg, tselc^er 
im ®en)i4)t son 412^ auf 384 ©ran rebucirt toirb unb i^n jum ^leingelb mad^t ^armontfc^ 
mtt ben @ilbers2}?iinjen fleinerer SCertlje unb um i^m bercn gleici^en Umlauf ju fi^ern. Der 
(gilber-Dollar son 412^ ©ran, auf ©runb feineg ttjirflt(^en (tntrtnpfc^en) ?KetalI-2!Bert^eg, 
lsel(^er ^iiljer alg fetn nomineUer tft, 1;)at langfl aufgeljort cine 5[^itnje beg Umlaufg ju fetn unb 
toirb er son ben ©tlberfc^mteben gef(|moljen. Sr ctrculirt fe^t nii^t im ^nbel mit irgenb 
einem 2anbe unb tsir fbnnen ben ©ilberfc^mieben unb ben gabrtfanten in biefer ^inftc^t mebr 
^elfen, tsenn tsir i^inen gcftempeItc5)?ctall-Sarren berfelben (Stanbarb liefern unb ung babur4> 
oie Unfoften ber ^ragung erfparen." 

iperr ©toug^ton fagt, ber ©Uber^^ollar ift ju to^xt\))oo\i, 

2ln bemfelben 2;agc fagte $crr (Stoug^ton in ciner fieben ©palten fiillenbcn fRtU (berfclbc 
Sanb @e{te 2308): 

„Die erf(^affenen (^ilbermiinjen jinb ber Dollar (384 ©ran Xtcf) ber ^albe Dollar, 
siertel Dollar unb Dime, tm SDertbe unb ©etoidjtc eineg l^alben, siertel unb eineg j;cbntel 
Dollarg unb hjeiben jtc jum gcfe^Iidjen 3at)Imittcl gemad^t in Setragcn nic^t itber fiinf Dol- 
larg in eincr 3fl|lung. Der ©ilber-Dollar, h)ie er je^t gcpragt toirb, ift im 23arren 3i Scntg 
me^r toert^ alg ber ©olb-Dollar unb 7i dcntg me^r alg gtset ^albe Dollarg. Da er einen 
gr(3§ercn toirflid^en (intrinfifdjen) uitb nominellen ffiert^ bept^t, ifi eg ftc^er, ba§, fobalb tt)ir bie 
Saarja^lung toieber aufnel)men, er bem Umlauf entjogen unb nur son gabrifanten unb (Srpor- 
tcuiett alg 33arren-9}?etall 0ebrau4)t werben toirb/' 



8 

§err potter fagt, bag ha^ gefetfid^e 3^'^;'f^ittel (Solb fein foil. 

^err '•pcUer, btefen 2;()et( ber SScrlagc befprec^enb, fagte: 

,,C^rr (Spred^er, bteg tft eine Sill »on SBid^ttgfett 211^ jic am5Infang ber ®{|ung fccm 
taufevorlag ^atte td^ getoiife (StniDcinbe brtgcgett. 3e^t abcr, tn Slnbetrac^t oiler Umftcinbe, 
iteige i^ tni(^ bem ©laukn ju, ba§ biefc Sinttanbe ntd^t ioollftanbtg bere(^ttgt ttaren. 3eboc^ 
nac^ iDetterem 5?ac|ben!en bin td^ itberjeugt, ba^ btefe Sill eine 23orlage ijt, toeld^c t»ir nid^t 
anne^men [oUtem * * * ^t * e«- * 

Diefe 33111 mac^t SSeranbcrungen in bem gefe^lic^en gemiinjten QJelbe beg Sanbeg tinb 
fubftttuirt aU ge[e^ltd;eg 3nMmittel nur ein!][)?etnll an\tatt pei t»ie eg friit)er tt)ar» 3^ glaube 
felbft, ba^ bie0 eine tceife Sefhmmung ift unb ba§ ba§ bie gangbarc (gefe^lit^e) 5JUinje, mit 
ber 5lugna^me be» tleingelbeg, nur aug ®olb bejlc^en foil. 2lber iuarum follen tutr benn je^t 
Uber btefe grage ©efe^e erlapn, ha toix toeber bag etne no^ bag anbere Wdall alg Umlaufg- 
mittel gebrau(|en ? 

!Dte 33tll ntac^t ebenfoUg 25eranberungen im ©ewic^t unb SBert^ beg DoUarg unb glaube 
td^, ba§ bieg eine ?^rage ift, tt)eld^e unfererfettg fel^r ernfle 33eritdftc^tigun0 finben foflte unb 
iuelc^e, ba iuir ja bod^ gegentuartig fetn gemiinjteg ®elb benii^en, ein ganj unnotbigeg Z\)tma 
fur ®efe0=Srla^ ijl." (33anb 102, <5eite 2310.) 

$err Pellet) Begiinftigt ©olb al§> 9^ormaI= unb ©Uber al§> ^iilf^gelb. 

Unb ^err feUei^ (»ott t»eldbem beric^tet tcirb, ba§ er jpatcr geau^ert \)akt, ba§ er nic^t 
n)ei§, ob tie Sid ben 5^ormal-(gilberbollar aufgiebt) fagt an bemfelben Za^t (®lobe, Sanb 
102, @eite2316): 

„3d^ nib^te ben C^ftrn, ber eben gefproc^en l)at (^crrn ^^otter) bitten, ob er irgenb eine 
gfJegierung in ber 2Belt fennt, irelc^e it)re ^itlfgmUnje ju sotlem 2Bertt)c ^erftellt? 'Lie 
(gilbermiin^e Snglnnbg tjl jel)n ^'rojcnt unter bem 2Bertl)e ber ®olbmiinje, unb, nac^ bem 
3?nt|)e (Eac^terftanbiger biefeg Sanleg, foJDot)l h)ie ber Snglanbg unb gfi^nfrfii^^/ ^aben bie 
Snpanefen innerb.ilb beg le^ten Sabreg i^re (Silbermiingen jtDiilf ^Vojent unter bem ^}}?iinj' 
wertb beg ®olbeg bergeftctlt unb au^ btefem ®runbe ift eg unmoglii^, bie "Doppelnjo^rung hti- 
jubebalten. !Dte SBertbe loon ®oIb unb Silber ftnb beftcinbig fd^roanfenb. ©ie fbnnen in 
lte[em 3abre nic^t bejlimmen, toeld()eg bie relati»en SBevtbe beg ®olbeg unb beg (Silberg im 
na($ften 3al)re fein tcerben. 33or ^urjem ftanben fie 15 ju 1, U^t 16 ^u 1. 

Sllle Srfabrungen {)nben folglid^ gfjetgt, ba§ ©te etne^fJormal ^ilbermiinje f)aben miiffen, 
n^eldse loor alien nnbern ein gefe^Iic^eg 3at)lunggmittel (legal tender) bitbet, unb bann miigen 
(Bit Sbre l)augl{c^e ^^equcmlicbfeit bornuf ric^ten, ba§ Bit alg |)iUfgmittel bie Silbetpragung 
befi^en, ti^elc^e in alien Xlietlen 3l)reg Sanbeg alg gefc^lic^eg 3ablitng^nitttel fiir einen begrenj= 
ten 33ctrag circulirt unb nac| feinem 5'?ennt»ertl)e »on^3t)rer 3^egierung einlbgbar ift. 2Iber, 
metn ^txx, idi) lenfe bie Stufmerffamfeit beg |)aufeg ttteber auf iiit STbatfac^e, ba§ bie ^crren, 
toel4^e btefe Sill befd'mpfen, bet ber $8e|)auptung serbarrcn, ein ©ilbers^Totlar i^abt 3i Sentg 
mel)r tt^ertl) alg etn @olb-X)ollar unb fteben Sentg me^r ffiertl) alg jttjei balbe Dollarg unb bap, 
folange biefe ^Ji^ostftonen serbleiben, Bit in bem Sanbe feine ©ilbermiinje balten fbnnten." 

2ln einer anberen ©telle in berfelben S^lebe fagt ^err ^elle^ : „3ebe 5}?iinje, bie nic^t ®olb 
ift, bleibt ^iilfgmittel. 3d^ toteber|)olc eg, mein |)err, jebe ?D^iinge bie ntc^t ®olb i|i, bletbt 
C)ulfgmittel/' 

©enator ©tett)art er!Iart fic^ fiir ©olb. 

^err BU^axt, bamalg t^te je^t Senator son ?f?e»aba, fprac^ bei einer anberen ®clcgen- 
ptif, etnige 5U?onate fpa'ter, {BtiU 1392, S3anb 2, Xbeil 2 beg ^ongrefftonal 9fJecorb): 

„3d^ serlange ®olb alg ^fJorm unb fetn 5)apiergelb, welt^eg nidbt 
einlbgbar in ®olb tft." Unb ungefa'br jwei 2Bo4ieu fpd'ter, am 20. gebruar 1874, 
lagt betfelbe ^err (in bemfelben Sanbc, ^eite 1677): 



99 



,,1)urd^ btcfen SJorgaitci tocrbcn totr ju ciitcr fpe^iteHett S3aftg gctangcn, unb tuean bfr 
(irkttcnbe 5}?atitt cmctt Doflar cr^jatt, »trb bcrfclbe btc faufettbe ^raft etncg SjoKar^ befi^rn 
unb cr totrb ntc^t in btc ?age serfc^t Joerben ju tl)utt, h)ag fur i^n ober bte |)eri?orbrtngcnben 
^[a^en unmbglic^ tfJ, ndmli^ auf Sour^, ©d^toanfungcn ober bag 23orfenfpiel in ^^eio 2)orf 
5lc^t gu ^vtbcn; abcr cr t»irb tuiffen, toag fcin ®elb t»ert|) ifl* @olb ift bie aUgemcine ^f^orm 
ber 2Bc(t. Sebcrmann toci§, irag cin ©olb-DoIIar tocrt^ iji." 

T)ag ftnb bie SBortc bc0 (Senator^ (Stewart, e^c cr ber SfJcjjrafentant cincS f |) c j i c 1 1 en 
SntereJTeg h)urbc» 

Deffentlic^e ^i§!uffion be§ 2I!te§ t)Dn 1878. 

(£g if} gcriigt toorben, ba§ nur tocnig tn ber offentlic^ien 5)ref[e iibcr biefe ©efe^gcbung 
gcfagt tourbe. giir biefe gilt bie 5lnth)ort, bfl§ im 3a^re 1873 fein 5}?etaU tnt Umlauf war, unb 
eg war nur cine SBieberl^oIung beffcn, toai toor mel^r olg 20 3a()rett cine ^anbelgfriftg ^erbor- 
gebrac^t ^at. 

!Die 23ifl felbfl ifl wa|>renb brct ^a'drc toor bcm Scngrep gen^efen, jcbc it)rer (Sittjjeltjeiten ijl 
genau crortert worben ; fie ^affirte enblic^ mit ber cinjigen ^injufiigung beg C>fl«belgboflarg 
unb bag war ni^it ber auggebef)nten (Srorterungen wertl), 

^ie ^robuftion t)on ©olb unb SilBer. 

T)it ©efc^gebung 1853 unb bie son 1873 war baftrt auf bie fommerjieHen 3«Ranbc, 
weld^c ^auptfad^Iidb burdb bie SSerfc^ieben^eit btr Slugfu^r biefcr beiben 5D?etaQe in bci: 
3?er. (S'taakn unb in ber ubrigen 2Celt cerurfad^t wurben. ^affen ©ie ung biefe furj betrac^ten, 
unb fe^cn, warum son 1853 big 1873 unb noc^ fiir einige 3abre fpater ®olb in i^Mc »orban- 
ben unb billiger war; warum fpater ber 5^reig beg ©ilberg ftel; fo, ba§ bie beiben auf gletc^cm 
gu§e jianben, worunt eg im i^aHtn bitcb big ju biefcr niebrigen ©tufe unb cnblic|, warum in 
ben le^ten 3a^ren ber 2Bec^fel im SScr^altnig jur ^Jrobuftion jic^ ge^altcn bat unb ttO(^ immer 
ftarf gu bcm ®Iaubcn leitet, bap in einigen 3a^rcn bie friiijcre ®leic^{|eit wieber|)ergefte(lt 
fein wirb* 

©olb in ben SSereimgten (Btaaim. 

23tg jum 3al)rc 1848 bat unferc yd^xli^t ©olbaugbeutc ntemalg cine Wli^iion iiber- 
fd^ritten, auggenommen eine ^icinigfcit in ^Wii ^a^ren. 3n jenem 3abre ftieg fte plo.^lid^ ju 
jet)n 5!)iiUionen (ein Setrag gleid^ ber gefammten aBeltprobuftion big jum 3at)re 1840) ; in 
1849 ,^u 40 !!!}?i(j[ionen, in 1850 ju 50 5J?ilItonen unb rangirtc tton bicfer 5igur ju 65 5J?tC(iDnen 
bi^ ^n 1860. %\xx bie folgenben fiinf 3al^re wec^fe(tc fie »on 40 big 46 5[}?illionen unb son 1865 
big 1870 betrug ber jdi^xli^t J)urc|fd)nttt iibcr 50 Wifiioncn. giir bie nad^ften fiinf 3abrc 
©aren eg burc^fcbnittlic^ 40 unb ging 1878 big auf 51 5)ZiUionen oufwartg unb wec^felte bann 
^on 30 in 1883 big ju 39'A 5J?iaionen in 1894 ah. 5Die le^te Buna^me batirt »ott 1892, alg 
lie ben niebrigften ©tanb son 33 ^Jiiflioncn bejeic^netc. 1893 wud^g bie ®oIbaugbeute auf 
135,900,000, 1894 crrcic^tc fie $39,500,000. Dag ^robuft bon 1895 i|} U^ je^t son bcm 
Direftor ber 5J?iinjc, »on bcm sorgenanntc 3<i^lctt mitgct^cilt Wurben, noc& nicbt feftgef^cQt ; 
aber bie 5}?ineral-3nbuftric, cine Slutoritat in biefcr 58ejie^ung, giebt unter bem 10. Slpril 1896 
Dag ©olbproouft ber 93er. (Staaten mit $46,830,000 an, bag ^ei§t cine Snna);)mc son iiber 
fieben 5)^t(ltonen. Der Direftor b2r ^unjc fcba^t in feinem am 14. Slpril 1895 gegebenen 
58ericbt bie 1895er d^olbprobuftion auf ungefa^jr $47,000,000/ cine fi(^ becfenbc Uebereinftim- 
mung mit ben 2lngaben ber 5JZincral-3nbuj}rie. 

©olb in ber 2BeIt. 

Die 65oIbbrobu!tion ber 2Be(t ^at feit mand^en 3«l)rcn toor 1840 etwag mcbr alg 10 
^iaionen ja^Uic^ im Durd)fi$nitt txxii^U 3tt ben jel()tt 3a&vcii sou 1841 hii 1850 wucjjg ftc 



10 

Ho^Hc^ Jit bcr hamaU Ux\^\(Mtn ^c\)t won S36,393,000. 9Zt^t jufri'ebcit mit btefcm 
cnormen ©etvinn jeifiten hit naci)ften funf ^a\)xt, 1851 U^ 1855, etn ^^rofcuft Dott me^r a(g 
S^mal flro§fr, namli4) $132,513,000 oter tie unermepHc^e ©umme »on $662,566,000 fur 
fctetc fiinf^a^re. 33ott 1856 bt0 1860 betritj ber 3a^re3fcure^fc^n{tt $134,083,000, ocrminberte 
licfe t»ann urn 11 5)?tatonen tn ben md^\tcn fitnf 3abren, ftt'fg auf $129,614,000 son 1866 bt3 
1870, flel bann ti^ieber auf $115,577,000 tn 1871 bt0 1875, auf $114,585,000 in 1876 big 
1880 unb auf $99,116,000 tn 1881 bfg 1885. Zici tear ber nicbrigjie ©olbocrmerf ber 2BeU 
fctt ben le^ten »ierjtg 3al)ren. ©ett ber ^dt ijl bte diolbprobuftion tcieber beftanbig geftt'egen 
hi€ jum 3a^re 1892, in hjelc^em bie no^ niebogetoefene ^ot)e »on $146,815,100 errcic^t njurbe. 
1893 war einc fernere ^ttnaljmc »on onna^ernb 11 2J?ia(onen ju $157,287,600 ju sermerfen, 
wn^renb ber Setrag in 1894 23 WiUioncn raet)r, alfo $180,626,100 augmac^tc. Die abgcft^a^tc 
©olbau^beutf fiir 1895 betragtiiiber 203 ^JJinionen, bie »on 1896 wirb anna^ernb $250 5>?itli- 
onen betragen, n3enngleidj fonferoati^jc ^tbi'c^a^ungen bag ©olbprobuft ber 2DeU inner^alb ber 
fiinf 3at)re auf $300 'Uitaionen t>ag 3a^r be^eicjinet. 

Sanber ber S^nal^me. 

(5g ntiic^tc intereffant fein ju erfab;rcn, t)?ober biefe gro§c 3ttnat)me gefommen if}. ®g tuirb 
nng Jpie je^t auc| fiir bie 3^tfunft in ben ©tanb fe^en, bie 33erec|nung aufjuftcClen. T)ie 
l)auptfa4)lii$f}en golbprobujirenben Hnber fiir bag 3a^r 1894 finb ber 3tei^e ii;rer Setrage 
falgenbe : 

Slufiralien $41,760,800 

2lfrifa 40,271,000 

S3er. ©taaten 39,500,000 

. fRu^lxnt 24,133,400 

dbina 8,556,800 

SDJerifo 4,500,000 



3nggr|ammt son \td)i Wnbern $158,722,000 

UntCT ben obigen jeigt fitjina feine 3«tta^me, T:iffe3, toit alle anbern 9?at{onen 
bifibt bei bemfdben, %\\)x fiir 3a|)r. T)it neuerlic^e uute jufiinfiige 3""^^^^ ^<^t ft*^ 
gejeigt unb hjirb ertcartet in 5lfrifa, 2Iu)}ralien, S3ereinigte ©taaten, 3^u§Ianb unb Wltxifo, 
jDiefe 3una|)niett finb folgenbe getoefcnt 

1894 ntf^^r alg 1894 mcl^r a\i 1895 mc^r al0 
1892 1893 1894* 



23er. (gtaaten $2,900,000 $ 3,545,000 $ 7,330,200 

5iuftralien 1,529,600 6,072,200 7,000,000 

5lfri!a 4,711,500 11,328,500 15,000,000 

mmio 176,100 3,194,700 5,000,000 

9lu§lanb 3,000,000 



3una^me $9,317,200 |24,140,400 $37,330,200 

* 2Ibgef^agt. 

Die 3una^me fiir 1896 gegen 1895 ij^ burcd (Sad^^erjianbigc obgefd^a^t auf 

aSer. Staaten 10 miliontn, Sluftralien 10 ^D^illtonen, Slfrifa 20 3J?iaionett, 5^e;ifo 

5 5[Jiiaiouen ; inggefammt 45 SJiiaionen, 

©ilber in ben $8ereimgten (BiaaUn, 

5Bott 1792 hxi 1834 mx bie ©ilberprobuftion belanglog; »on 1834 hi^ 1844 if} fte auf 
jufamnien |250,000, son 1845 big 1857, beibeSa^re eingefc^loffen, auf $50,000 ja^rlicj) abQi- 



11 

m^t ; 1858 er^b'^tc ftc& btc ©umme auf $500,000, 1859 ^l |!e auf ^100,000, 1860 txV^W 
fte pc^ totcber auf $150,000, 1861 txat tint jjlo^ltd^c 3una^me auf 2 .^JJiUtonen Dollar^ 
tin, toelc^e 1862 auf 4^ mniontn ^Dollars unb 1863 auf 8^ mini6ntnT)o\laxi [i6) ijermefjrte 
unb rangirtc »on 11 ^JiiHionen bt0 16 Wlliontn hii jum 3a^re 1871. 3tt jenem 3a^« 
crretc^tc fte 23 5D?tatonen unb »aritrtc son 28 hii 48 5}?taiotten big jum Mrt 1885. T)ie 
(©fibcrgelbentiucrttjung (demonetisation) fanb tn 1873 j^att; btc aBtebcraufna^mc unb ter 
®ebraudp ber ®elbmiinjen 1876. 3Son 1874 bt« 1884 tuar nur cine gcringc 3una(^e, bie 
f)o^^t gtgur jetgtc 1884 $48,000,000, 1885 $51,600,000, picg bann auf 53 WUiontn in 
1887, auf 59 tn 1888, auf 64 in 1889 unb crret^te 70 5D?tntonen tn 1890. 1891 pel fie auf 
l$75,417,000 unb eriangte fd^He§(ti^ in 1892 ben ^oc||len 23etrag son $82,101,000, loon toclcbcr 
^ii^c fte beftanbf tn ber 5lbna^me begrtffen tjl. 1893 flel ber SBctrag.auf $77,576,000 unb 
auf $64,000,000 in 1894. 

SSergleic^enbe gunal^me. 

SSon 1874 m 1894 na^m ®i(ber $26,700,000 ju; in berfclben 3ett tjcrmc^rtc jt(| ®oIb 
ctn)a^ mcl^r a\i 6 SiJJinienen, aber eg war fetnc bcmerfen^hjert^e 3unat)me in ©ilbcr Ui 1885. 

©ilBer in ber SSelt. 

"S^er ja^rltdpe Durtifcbnitt^-^J^itn^toert^ beg ©tfberg, tt>el(^e3 tn ber 2BeU ^robujt'rt twtrb, 
betrug »om 3at)re 1545 big 1761 ijttjtfc^en $12,450,000 unb $22,162,000. 33on 1761 m 
1860 rangirt er ^on $19,144,000 ju $37,618,000, 1861 hi^ 1865 tear er $45,772,000, 1866 
m 1870 $55,663,000, 1871 bfg 1875 $81,864,000, toatirenb »on 1876 big 1880 cr i^u etnem 
3a^regburcl)[($nitt »on $101,851,000 unb 1881 big 1885 auf $118,955,000 jiicg. Die 2Bert^e 
fur 1886 unb 1887 n>aren |120,213,611, rcfp. |126,095,062. (Sr fu^r fort bejlanbfg su jletgen, 
urn 12 mHiiontn {d^xU^ big 1893, alg cr $214,745,300 betrug. t)ai 3a|)r 1894 jeigtc nur 
cine geringe 3una^me — einc illeintgfett Don cttoag itbcr jtwei ^illiontn fttr j'ene ^eriobe. 
2B{e bie Slugbeute tn ben 35eretni^en <Staaten etnen Slu^fall »on 13i 5J?in{oneR »on 1893 
big 1894 gebabt t)at unb tuie b{efclben3uf^anbc bur(^ alle, bag tDcrt^solIe ^ttall jjrobujirenben 
Snnber bie Dberf)anb geiuinnen, fo ijl eg jtc^er, ba§ bie 0{itcfgange fitr 1895 cinen Stugfalt »on 
ungefat)r 15 ^IJZillionen jeigen tucrben unb ber uon 1896 einen folc|ett »on ungefcifjr 25 
^Uaiontiu 

9Jlun5= gegen ^anbel^ttjertl^. 

Die »or|let)enben ^af)\tn in Sejug auf ©ilber, weld^e ftc^ auf ben ^er. ©taatctt 5!J?itttj- 
iDcrt^ gritnben, bilben teinen genaucn SDegweifer fitr ben t|)atfac^ltdbcn 9}?arfttoert|i. SSon 
1833 m 1850 tear ber DHr4)[^ni«gpreig ciner gein-Unjc ©ilber ungefai)r $1.31 ober 60 
^ence. 3n 1850 unb m ju 18/2 rangirtc cr urn $1.33 ober 61 gjencc. ^ux 1859 crreic^tc 
er $1.36 eber 62 ^ence. 

®urd^fd^mttli(^er ^axxtnw^xt^. 

3n 1873 betrug ber T)ur(|fc^nittg-23arrentoert^ beg ©tlbcr^Dotlarg $1,004, ber if)n toert|)- 
tioaer mac^te alg ben (Siolb^'Doaar. gitr 1874 mx cr 0.988, 1875 0.964, 1876 0.894, 1877 
0.929 unb t)at feft ber 3eit 0.90 nii^t erreic^t. 3tt 1886 ging cr in bie ©icb^igcr, j^ieg 1890 
nuf 0.81 unb fid 1891 auf 0.764, tn 1892 ouf 0.674, in 1893 auf 0.603 unb in 1894 
auf 0,491. 

1873 unb 1894 

3m 3al^re 1873 ent^ielt tin ©ilber^DolIar 371.25 ©ran feineg (Stiber, tscld^cg «ur 
369.77 ®ran i^cn bemfelben ©ilbcr faufcn toiirbc. Der 5E)ZiinihJcrt^ »ar alfo H ©ran gcriiigcr 
alg ber ^anbelgtoert^. 



12 

3tr 1894 tDutbc Ux^tlbt Dollftt 756.04 ©ran gelauft ^abcit, ct« boppcU fcS)!fl unb ttO(^ 
5^ (S^ran bariiber* 

SBcnbepunft. 

^iir bte crften je^n 5Wonatc (bl§ 30. DftoBer) be§ ^al^rcg 1895 roar bcr ^urd^* 
fcl^mtt§=39arrenn)ert^ oon 0.491 auf 0.506 geftiegcn. ©iefer 6emer!en§Tt)crt^e ^lufgang 
roar ber 3t6nai)mc ber 9lu§6eute be3 roci^en unb ber 3wna^me bc§ gelben ^JJetalle^ roal^* 
rcttb ber le^tcn jwet Sabre jujufc^reibcn, einc 3una^me, bag ift jtc^er, t»el(^c fic^ bag ttad(>fle 
3a^r fortfc^en tt>irb unb toirb ben Ueberfc^u§ beg toeipert ^ttailti in ber 2BeU abforbtren 
l^elfem 

SSSarum roei^eS SJlctal tm SSertl^e jtcl. 

tSftcl ©ilBcr, obcr rourbe (Solb !nappcr unb beS^alb t^euret? W\t f)aUn 
gejeigt, bo^ in ben SSeretnigten ©taatcn bie ©olbprobuftion fic^ beftanbig iiber 30 unb 
(auggenommen in 1877 bi§ 1878) untcr 40 SRiUionen ©on 1874 big 1894 gc^alten ^ot ; 
baB eg in ber aCelt in berfclben Scitpertobe Bcftdnbig con $116,577,000 big $180,626,000 
angeroad^fcn ift. Slugenfc^einlic^ tf)at bag ©olb rodl^renb biefer ^eriobe fcine »otte 
^flic^t unb crnteic ben 3luf cine§ SWetatteg »on beftanbiger unb l^inreid^enber 3unal^me 
in ber 2lugbeutc. 

©itber rourbe juerft ein i5^a!tor in ben 35ereinigten ©taatcn im ^a^rc 1861, ftl§ jroei 
3Riaiottcn3)oaarg probujirtrourben; in 1864roaren eg 11 3Jiiriionen, in 1874 $37,300,000; 
in 1884 $48,800,000 unb l^ernac^ t)on 61 Big 81 3Rinicncn jd^rlic^. 

^ic 2Settprobu!tion ift Don eincmSa^tcgburc^fcbnittg=3Kiinjroertl^e »on $81,864,000 
in 1874 auf $118,955,000 in 1884 unb auf $216,892,000 in 1894 gefticgen. 

SSon 1874 big 1894 brac^te ©ilber aud^ nic|t anna^ernb einen fo t)er^attni§ma§igcn 
©croinn, aI8 bieg mit bcm ©olb oon 1841 big 1850 unb con 1861 big 1856 ber gatt roar. 

^aS SSer^altnt^ ber gjletallc. 

3tt 30© Sa^ren, 1545 big 1840, roa^renb roetci^er 3eit ^panxin ben Jletc^t^um fctncr 
ameri!anifc^en ©ilberminen auf ben SOBeltmarft cingefii^rt f)ai, betrug bag aUgcmeine 
2)urcl^fd^nittgt)erl^dltni^ ber 2Bertl^e ber beiben 5D'ietalIe ungefdl^r 33 ^rojent fiir ®oIb 
unb 67 ^rojent fiir ©itber. 3Son ber ^eriobc 1841 big 1850 big ju jener ©on 1876 big 
1880 roar bieg SSer^dltniB ungefd^r 66 ^rojent fiir ©olb unb 34 ^projent fiir ©ilber — 
oici grower alg ber brei^unbertjd^rige 2)urc^fc^nitt: ©on 1881 big 1894 roar ®oIb beftdnbig 
44 ^rojent, rod^renb fiir 1894 eg 45.6 ^rojent ftanb. @g ift roo^I biefer 3)urc^fc^nitt 
forgfdltig ju mcr!cn, roeil burc^ ein feltjameg 3uf«»^"^s"ti^^ffcn biefcr ^rojcntfa^ 
genou bag rctatittc 25er^aUnt§ beg ^etntlgelbeg ber 2BeU gtebt, totl^ti ®oIb in ben 400 3a^- 
ren feit 1493 gewaljrt ^aU -Diefe ©olb-^Jrojente trerben ^o()er fein alg biejer Dur^ifdjinitt fiir 
1895 unb 1896« 

^m ^atjre 1876 brad^te iperr ^etteg (^ennf^foania) cine S5iII ein, roel^e bte ^rSgung 
Don 9lormal (©tanbarb) 2)oIIarg (412J ©ran) unb bie ^erauggabc berjelben alg unbe* 
grenjteg gei'e^Ud^cg 3a^'^w"9^w^ittel (legal tender) jum ^votdt fjatit. 2)agfelbe ^a^r 
brac^te ^err 93lanb (SDiiffourt) cine SiU fiir bie unbegrenjte 2luggabe uon ©(^a^amtg* 
noten gegen ©olb« unb ©ilberbarren ein. SBcibe biefer 3J?a^na^men rourben in ©rrodgung 
gcjogen unb im Wdx^ 1877 mac^te ein? ©ommiffton, befte^enb auS ©enatoren unb 
Sleprdfentanten, einen Seri(^t in Sejug auf ©olb unb ©ilber. 

2)ie ^eae^sSiC, abgednbcrt bur(| ^errnSlanb, cr^iclt bie ©enc^migung beg ^aufc§ 
(tm S. 9lot)embev 1877. ^iefe fet^t mit bni !i|lanbs3ufS^en bie freie unb unbegrenjtf 



13 

^ragung oon 412J ©ran ^oIIar§ feft unb mad^t biefe al»s etn unbegrenste^ gefe|tic|e3 
3a{)lung5mittel, auggenommen, roenn SSertrage anbere SBeftimmungen feftfeijen. 

SBlanb.Siaifon STct. 

®ie 5leire9»55ranb 33111 tuurbe im ©enat abgeanbert unb routbe 6e!annt at^ bie S^Tanb* 
Slllifon S3iII. 2l6geanbert in bem ©enate unb enbtic^ paifirt befdircinft biefe ^ill bie 
^rdgung auf oier 3JlilIionen monatlid^, roeld^e ber ©d)a^amtg;©efi*etar ju erraerfien unb 
bie Seignorage, b. 1^. ber profit an biefem ©efcl^afte unb ber ^rcigung bem offentlid^en 
©cf)a^e sujufiil^ren l^at. 2luf biefe 2trt wurbe ba§ ©itber, fobalb eg gepvdgt roar, §u 
ciuem unbefd^rdnften gefe^Iic^en 3a^Iung§mittel gemad^t, auSgeuommen fiir ©ertififate, 
fiir (SJotb; unb ©ilberbarren S)epofite unter bem 2t!t con 1863 unb in ^dllen, rao anbereS 
®elb fontraftlic^ feftgeje^t roorben raar. ©e!tion 3 beoollmdc^tigt bag ©epofit btefer 
SoIIarg unb geiud^rt bafiir bie Stuggabe uon (©ilber*) ©ertififaten. ©ie rourbe @e]e§ 
iiber beS ^rdfibenten SSeto am 28- ^yebruar 1878. 

SBIanb unb longer 33iII§. 

Sm ^a^re 1886 brac^te §err SBIanb abermalg eine ^ill etn fiir bie freie unb unbe? 
grengte ^rdgung von ©ilber, raeld^e bejroedfte, ben SJiinenbefi^ern unb ©itberbarren* 
^robugenten ben gangen profit ber ©eignorage ober ber Sifferenj sroifdfien ben rairflid^en 
j^often unh bem gefe^Iid^en 3«§tunggraert^e beg 2)oIIarg, roenn er gepragt ift, gugu* 
iDenben. 

§err (longer legte eine anbere $8iII cor, raeld^e bie Slnfid^ten be§ ©e!retarg SBinbom 
einnerleibte, in raetdier ben ©ilberbefi^ern geftattet rairb, bogfelbe gegen ©mpfang pon 
©d^a^amtgnoten jum Setrage feineg jeitigen SJiarJtraertl^eg ju beponiren ; biefe 3'ioten 
foUten bei SSorgeigung gegen jeitige SBert^e einlogbar fein. 

®a§ @^ermans©efe| t)on 1890. 

S)ie Gongcr Sill in abgeanberter ^^orm paffirte enbtid^ unb raurbe am 14. ^uU 1890 
sum ©efe^; eg ift befannt unter bem S^iamen ©^erman-@efe^. ^agfelbe beftimmt ben 
5?auf oon 4,500,000 j^einsUngen ©itber jeben 3Jionat unb jroar nid^t tt)eurer atg ^um 
^reife t)on einem Xollav fiir 371.25 (SJranreinen ©ilberg unb finb bafiir ©c^a^amtgnoten 
augjugeben. ®ieje 3^oten finb auf SSeriangen einlogbar in SJiiinje unb fonnen raieber 
auggegeben werben. ©ie n)urben atg gefe^tid^e 3fi§^unggmittet fiir aUe. S^erpflid^tungen, 
offentlid^e ober pripate, auggenommen, mtnn augbrii^(ic§ eine anbere 2lrt pereinbart 
roar, fiir ©teuern, ^blh u. f. ro. beftimmt. S)ie auf biefe SBeife percinnal^mten 5^oten 
fonnen. roieber auggegeben roerben. ©ie fonnen ebenfattg alg Xl^eil ber gefe^Ud^en ©elb* 
referpen ber 5RationaIban!en angefel^cn rcerben. 2)er 3lft beftimmt ferner, ba§ auf 3Ser« 
langen beg ^^^i^aberg ber ©d^a|amtg;©efretar fold^e '^toUn in ©olb ober ©ilber einlbfen 
foil nac^ feiner Slnorbnung, inbem eg (fo fagt ber 2l!t) bie eingefcf)(agene ^olitif ber 
SSereinigten Qtaaien ift, bie beiben 3JtetaEe auf einer ©leic^^eit mit jebem anbern, auf 
bem gegenrodrtigen gefe^Iid^en SSerl^dltuife, ober folc^em SSec^dltniffe, roie eg burd^ ©efe^ 
angeorbnet fein moc^te, ju l)alten. 

©eftion 3 beftimmt bie «13rdgung Pon $2,000,000 monattid^ big 1. ^uli 1891 ; nac^ 
biefem ^age foDiel atg not^ig roe. ben moc|te gur ©inlofung pon ©d^al^amtgnoten, bie 
unter biefem 21ft auggegeben rourben. 

^rgenb ein ©eroinn ober ©eignorage, roeld^e burd^ fold^e ^^ragung erroddjft, foU fiir 
bag ©c^a^amt oerrec^net unb bemfelben augbeja^lt roerben. 

9Ba§ ift ©eroinn ober ©eignorage? 

S)ie S3lanbs33itt, roie fie bag ^aug am 5. 3^opember 1877 genel^migte, (ftc ift fein 
(SJefe^ gcroorben) eriaubte irgenb einem ®igent§iimer Pon ©ilberbarren, biefelben au 



14 

eeponiren unb bafiic fitr je 371.25 (^mn rcinen ©t[6er§ (412| ©ran ©tanbarb ©ilBcr) 
einen gcmunsten S)oIIar, TOefei^er ein unBegrengteg, gefe|Iicl^e§ 3oi^^wttg§«iitteI fetn foHte, 
ju empfangen. ®r §atte nur etn^alB ^roient 2Jlun}un!o[ten fiir biefeg gro^e ^rtDilegtum 
ju enlric^ten. 2)cr ganje profit in btefcr Xran3a!tion !am nic^t ber 9tegierung, aud^ 
ntd^t bem S]oIfe burc^ bie 9?egicrung, fonbern mir ben SJiinenbcft^ern (ben ^axxen-^xohvL' 
jcnten) ju ®ute. 3n 1886 brac^tc Slanb erne anbere 23itt ein mit benfelBen sBejitmmun- 
gcn. ^errn ^tumb'S 5lmenbcment ju ber ©onger^SSiH, n)elc|e§ am 10. ^VLni burc^ ben 
©enat angenommen rourbe, aber ebenfaE§ ©erfel^Ite @efe^ ju raerben, geraa^rte biefelben 
SBePtmmungen. 

SlUe brei oon biefcn toaren in bire!tem ^ntcreffe unb BeDorjugten nur bic 3Jlinen« 
Beft^er. 2IIIc profile ober ©eroinne in bem ©cfd^afte famen nic^t ber Slegierung, um bie 
Soft beg aSoIfeS erleic^tern gu l^elfen, gu ©ute, fonbern raaren nur al§ profit unb©en3inn 
ciner Befonberen Jllaffe gefc^affen. 

^rofite ber ©etgnoragc. 

Saffen ©ie un§ fe^en, roeld^er 2trt biefe ^rofite roaren. Unter ber ^J^retpragung 
roixrbc ein 3JiinenBefi^er, rcenn cr Bei bem ^urd^fc^nitte in 1878 einen Sarren jumSBertl^e 
von 89.1 ©entg beponirt ^atte, Berec^tigt fein, oon ber DJ^iinje einen legal tender dollar 
jum SBertl^e »on 100 (SenB in ©olb ober ©ilBer ju erl^alten. ®r ra.iirbe einen 3tein* 
geroinn, aBgerec^net ben ffeinen Sctrag fiir aJliingung, oon 10 ©entS gemad^t ^aBcn, cin 
^Profit geraonnen auf bic Unfoften be§ 2SoIfe§. 

3n 1886 rear biefer felBe ^Barren nur 76.9 ©ent§ n»ertl^, ba^ gieBt berfelBen jiraffe 
einen Sieingeroinn oon 23 ©enlS unb Belaftet bafiir ba§ ganje SSoI! mit 23 (5ent§ fiir ba§ 
unfd^a^Bare ^riwileg, melc^eS ben 3KinenBefi^ern bie ©eregen^eit gieBt, bie 9lcgierung 
unb ba§ SSoI! biefer Sereinigten ©taaten alS ein £ a ft p f e r b ju Bcnu^en. D^ne 3n)eifel 
miirben i§re S)oIIarg fiir bie 3JiinenBcfi^er Billiger. 2Bie aBer miirbe eS benen l^elfen, 
meld^e biefelBen ©ilBerboItarl burc| ben ©d^roei^ i§re§ 3lngefxd^te§ unb ju bem collen 
^reife ron 100 ©ent§ fiir ben 2)oirar ju !aufen fatten ? 

aSare biefe 2JlaBregeI, fo wol^Itr^dtig fie aud^ fiir 'aen SKinenBefiBer mar, im ^a^re 
1894 in ^raft geroefen, ba§ tl^eure SSoI! miirbe ben 2JlincnIeuten einen 100 (Eents^oHar, 
melc^er aus bem ©ilBerBarren, ber benfetfien Seuten 49.1 Sent? gefoftet l^at, gegeBen 
l^aBen. 2)a5 SSoIf biefer 23er. ©taaten mag bie ^iidite fd^laflog ^inBringen, feufjenb 
nac^ mel^r ©ilBcr, metd^eS e§ Beitaufig nid^t annel^men i»irb, menu il^m baSfelBe gegeBen 
murbe, um i^m ju l^elfen, ba eg bag ^papiersSlequioatent oorgie^t, aBer e§ foUte nid^t 
ange^alten fein, irgenb cine Befonbere ^taffe unferer Siirger, mag fte auc^ noc^ fo Per* 
bienftooll fein, Big ju bem Umfangc ju unterftii^en, ba^ fie fiir 49 ©cnt'g einen ^oUav 
pragen laBt unb benfelBen fiir htn oollen SBertl^ in Umlauf fe^t. 2)ieg m5d^te allerbingg 
mel^r ©elb madden, aBer eg !ommt in bie unrcd^ten %a\^en, in bie %a]d)tn ber $Uiinen* 
Befi^er, con roelc^en bag Solf basfetbe nac^ bem mo^lBefannten ^auffpftem jum DoUen 
^reife erl^alten rairb. 

2Sa§ bie gretprdgung gefoftet l^ahzn raiirbe. 

Saffen ©ie ung bag 9lefultat einer fold^en finangicHen ©efe^geBung Bered^nen; laffcn 
©ie ung fe|en, mag bem 35oi!e biefer SSereinigten <BtaaUn bie g^reipragung nad^ hen feft* 
geftettten S)aten gefoftet ^aBen miirbe. 

Sm^a^re 1878 Betrugen bie2)urc^fd^nittg!often eineg ©ilBerBarren, genug um einen 
SRormal ©ilBerboIIar ^erjuftellen, 89 ©entg. 3« jenem '^a^xe miinjten pir 22,495,5;50 
t)on biefen 2)oIIarg. 3" H ©entg am 2)oD[ar miirbe eg bem Sanbe gerabe $2,474,511.63 
Soften madden, raeld^e bie ©ilBerminens^ntereffenten fiir ftc^ einftreic^en. 

^n 1886 miingten mir 31,423,886 oon biefen ^oEarg aug barren, roeld^e nur 77 
(Sentg fur i^'oen gemiinjten S)oltar !ofteten unb roelc^e, roiire bie§ unter ben ^retpragungS* 



15 

Sort^cireit gefd^e^en, bem Sotfc bie Betrad^tttc^e 6umme t)on $7,227,493.78 gefof^ct 
l^aben lourbe. 2)aa iciirbe eine bire!te Sranbfc^a^ung oon 6ctten be§ S^ongreffeS fiir 
bag offentttc^e 5lapttal gu ©unften ber ©tl&erprobujenten be§ Sartbeg bebeutet ^aben. 
©in roibernaturlic^creS SBeifpiel von Derfuc^ter SSergeubung offentUc^er ©elber raar noc^ 
nic tJerjuc^t raorben. 

2)a§ ©l^ermaits^efe^. 

Untcr ber 9lu§fu§rung be§ Shermans ©efc^eS Don 1890 fanbman, baB bie ^tegterung 
54 2Ki[Iionen Unjen ia^ulic^ !aufte, obec anna^ernb bag, roa§ in ben SSereinigten Staaten 
probu5irt rourbe. SiefeS ©ilber raurbe in ben ©eiootben be§ ©c^a^amteS aufgefpeid^ert 
unb ©c^a^amt§noten fiir bagjetfee oeraugga6t, roefd^e «uf Serlangen in @oIb eintb^bar 
raaren. ^ierau§ ift leid^t erfic^tlic^, ba^ eg nur cine '\^xa%t ber 3sit f^i" i^ti^b, rcenn bie 
Siegierung bie ©olbja^lung cinsuftellen oerpflic^tet jein raiirbe unb eine ©ilberbafig 
erreic^t l^aben, roenn biefe 2lrt fortgefe^t ware. 

SBiberruf be§ ©§ermans(5}efe|e3. 

3n ciner ©rtra - ©t^ung beS 53. ©ongreffeg, roelc^e im 2luguft 1893 etnberufcn 
rcar, rourbe nad^ einer langen unb (eb^aften 2)e5attc baS fogeuannte ©^erman*®efe^ am 
1. 3^0Dem5er raiberrufcn. 

S3etrag be§ ©tl5er§ im ©eBraud^e alS ©elb. 

®§ ift etn roeitoerbreiteteg SJliBoerftanbniB in Sejug auf ben n)ir!Ud^en 93etrag \>t^ 
©itberg, roeld^eg oon ber 3fiegierung alg @elb oerraenbet roirb. ©egenraartig giebt eg 
gemiinjt in ber ©eftalt con ©ilberbollarg, entraeber in ben ©eraotben beg ©c^a^amteg 
ober in Circulation, ^interlegte ©itberbarren, fiir roeld^e ©c|a^amtgnoten rerabfolgt 
rcurben, unb ©ubfibien?©ilbcr ju bem enormen Setrage con $627,925,632, oon raelc^em 
l^atfad^lid^ 2iaeg im ©ebrauc^e ift. 2)er ©efammtbetrag beg ©olbeg im ©ebraud^e 
betragt in ben SSereinigten ©taaten $618,875,157, ber ber ©reenbadfg $346,681,016. 
^araug iji crfid^tUc^, ba^ me^r ©itber im@ebraud^c ift, alg irgenb eine anberc ©elbart, 
unb ic^ glaube, eg miirbe in ^o^em ©rabe im ^ntereffc ber 9tegierung unb beg SSolfeg 
liegen, tuenn allcg ^apierg^lb unter $5 eingejogen roerben fiinnte, um an feine ©telle ben 
©ilberboUar ju fe^en, anftatt benfelben in ben Jiegierungggeraolbcn lagern ju laffen. 
2)ieg ift ber ^aH in ?5ran!reic§, S)eutfc|tanb unb ©nglanb, roo nur raenig, wtnn 
iiberl^aupt papier ober @olb t)on einer geringeren 58enennung alg ein ^funb ©terling 
in ©nglanb, 20 2Jiarf in 2)eutfc^lanb unb 20 ^rancg in ^ran!reic^, al[o anna^ernb 
$5 nac^ ameri!anifc^em ©clbe gefunben raerben !ann. 

5Dte 9flegterung§[d5ulb. 

3c$t, ^err ©precfer, t\)t tcp f(|Itepf, tciinfi^e td^ bte5lufmer!fflmfett bc3C)aufc3 auf eintge 
bcbenf(i(^e S^atfncben ju rtd^ten* Unter rcpublifanifdpen 2;arif-®efe^ctt, toaljrcnb ber 5)eriotc 
i?om 1, (September 1865 bt^ ju ber ^tit, alg ^raftbent Sleoclanb tnaugurirt wurbc tn 1893 — 
eine ^ertobe son 27i 3al)ren — toerminberte ftc^ bie Sftegieruitggfcljulb unb Dbltgattoncn wn 
$1,881,367,873, ober tm Durt^fc^nttt Don $68,632,000 jat)rltc^. Die ©^ulb fur ben ^opf 
betrug in 1865 |78, in 1893 $12.55» Da0 ift fi^erlid^) ein fefir giinpige^ S^fefultat, »etl t^ bie 
ganje ^ertobe ttom ^rteg3f(^Iu§ bi^ ju ber 3eit, tn toeli^er bie Dcmofraten btc tooHe SontroQe 
nller 3f{egierung3jtt)eige in bie ^anbe befamen* 5lc^ten ©le auf ben gropen Untevfcbteb in 
ber ginanipolttif jtoifc()en beiben ^Jarteien* ©eft bem 1. 5J?arj 1893 big jum 1. 5yjarj 1896— 
eine ^eriobe 'oon 3 ^abren — ift bie jingtragcnbe ®(^u(b nuf $262,000,000 angehjac^fcn, ober 
An X)urd)fcbiiitt »ott mebt al^ $87,000,000 iai)xli^, gegen eine 2lbnaf)me s?en ungefabr 
1569,000,000 jci^rltc^ unter ber republifantfc^en Slbminiftration ber oorbergcgangen 27 3a^re» 



16 

3)cmo!ratlfd5e§ gugeftanbrng. 
C>err Docfer?, ctne l^erijorragcnbc 2eu(|tc bcr Demofratte, mitQlith bc3 C^omttcg fiir 
SBctotUigungcn, mad^te in bcm ^aufc am 29» 5lp"l 1896 (gtccorb, ©cite 4971) folgenbc gej^- 
iieUung j 

„^txt ©tjrc($er, id^ toitnfc^e bcm ^aufe etnen einfadpen 23enc^t ijorjulegcm pr bog 
gigfalfa^r, enbtgcnb am 30. 3unt 1894, scrfe^Iten bie Sftcgtcrungg-Stnna^mcn btc laufcn- 
bctt 2lu0gabett son |69,803,260.58 ju bccfen. 2Bat)rcnb beg le^ten Ot^colia|reg tuar bag 
laufenbe Stnfommen unjulanglic^, bic laufenbeit 35crbtnbltc|feitett burd(> |42,805,223.18 
ju bedfert, unb eg tfl I'etjt abgefd^atjt, bap bag iDcfijtt tn bm laufenbcn (iinm^mtn fiir bag 
geflenipd'rttge gigcalja^r nii^t mniQtx aU |25,000,000 bctragen toirb." 
Dag ftnb Z^^at^a^m unb offtjiellc gtguren unb eg tottt mir fd^einen, ba§ l^terju ctu (£oms 
mentar iiberpfftg i% 

grete ©ilBerpragung. 

Die 3cii i|^ gclommen, ben!e i^, ^m ©pred^er, ba§ bte republifanifd^e 55artet entfd^IoJTett 
gegcn bie ©ilberfreipragung ?^ront madden foUtc, eg fei benn burd^ tnternationaleg Ueberein- 
fommen. 3c| bin toidig gewefen, aCleg, \oai in meiner traft lag, ^u tl^un, fotceit alg moglic| 
einen ©ilberbetrng in Umlauf ju ^alten, unb bie ^a\)Utt, bie i^ gegeben i)aht, ftnb fitter ent- 
fd^eibenb, bap bic republifaniftie ^artei i^rc ijolIeiSd^uIbigfett gct|)an ^at unb bie 
®renjc, \omit jie bie greipragung i)on (Stiber bctrip, erreic^t ^at unb in bcr beoorjie^enbcn 
dampagne foUte ftc reblic^ auf t|)rem juletjt etngenommcnen ©tanbpunft fiir e|)rlid^eg 
®elb »cr^arrcn unb ben gropen ginanj-Unternc^mungen unb ginanj=3nftttutionen bic gej^ig- 
feit geben, bic nur burd^ eine befiimmtc (Srfld'rung gegcn cinen erntcbrigten Sourg erreid^t 
h^erben !ann. Untcr gcgentodrtigen SScr^dltniffen tjl bie (Srb'ffnung unferer 
5}Junjftattcn fiir ?5teifilbcr cine Unmijglid^fcit. Sg bcbcutet ben din in 
unb ben 23anferott fiir »icle 5[Jiintoncn son 5!Jicnfd^ctt* 

Sagt 'oa^ ^fta'o be§ gortfd^ritteS Betoegen. 

Setjt, C>crr ©pvedper, ftnb toir er|l !iirjlid^ 3f"9^« ^on bcm ©dpaufpiclc gciDijJcr ?^reijtlber- 
SScfiirhJorter in bcm obercn ^aufc bicfeg Songrejjcg gctocfen, bic jtdp aug Demofraten unb 
^opuliftcn jufammcnfetjtcn unb bic gropen Subuilrie-Sntcrcffen bicfeg Sanbeg b ci b c r ^ e ^ Ic 
f ap t en, inbem fie gu 70 ?0'?i(lionen 5D?enfc&ctt fagtcn, ba§ eg fetnc ginanj-®e[et^gebung, feinc 
2:arif=®efetjgebung gebcn tDiivbe, hi^ (Silbcr ancrfannt fei, obcr mit anberen SBorten, big bic 
5D?iinjcn fiir ©ilber-grciprdgung gcijffnct feicn. 2luf cine folc^e Se^auptung, ^err <Spred^cr, 
fann eg nur cine Slntttjort gebcn unb i(^ glaube, in bcr 5lb|limmung Ui bcr beoorfte^enben 
2Bat)l mirb bag 3SoI! it(^ in feiner Doflen ^af3)t er()eben unb forbern, ba§ bic 33efiirh)orter 
oiefer Sntereffen nid^t Idnger bic 3tdber beg iJortfd^rittg auf^altcn, nad^ ben 55. tongre§ son 
oer Sinfiibrung foldb wcifer ®d^u0joll-®efetje, toclc^c nid^t nur augreic^enbe (Sinna^men fiir 
pie Scbiirfttifl'c bcr 3^cgicrung gctod|)rcn unb jum (©c|utjc aUcr gropen lanbiDirt(ifd^aft(i(|)en, 
ilrbeitcr unb Snbujlrics^ntcreffcn bicncn, Dcr^inbern werben* 

©umma. 
3d^ })dbt Dcrfud^t, |)crr ©prec^cr, in biefen tocnigcn SemcrFungcn cine ginanjgefd^idpte 
bicfer S^cgicrung feit bcm ^ricgc ju gebcn, tnbcm ii3) juglcid^ bic 55robuftion t?on <Silbec unb 
®olb feit ben Ic^ten 350 3a^ren gejcigt HU, in bcr 9J?einung, bap bie cnorme ^robuftion »on 
©ilbcr tod^rcnb bcr le^ten jc^n 3a&rc siel mit feinem gcgenrndrtigcn 23arrcntt)ert^e ju t^nn^ 
'{)at, unb ferner, |)err (Sprcc^er, bap bte gro§c 3«ttfl^»ttf in ^cr ^Jrobuftion »on ®oIb unb bic 
Slbna^mc in bcr ^Jrobuftion son (©ilbcr feit 1892, wenn bicfclbc noc^ cinige Satjrc an^dlt, ijici 
baju beitragen toirb, bap biefe ^^Jetatte in it)xtin 33arrcn»ert^c fid^ wieber nd^ctn werbem 



"Looking Forward'' 



FROM 



(( 



Three Evenings with Silver and Money" 



A TALK OF FOUR NEIGHBORS 



ABOUT 



Money and silver 



Part Two: "Looking Forward" 



FROM THE REMARKS OF 



Hon. Joseph W. Babcock 

OF WISCONSIN 

IN THE 

House of Representatives, Washington, D. C, 

June 8, 1896 



'' Looking Forward " 

FROM REMARKS 

of 

Hon. Joseph W. Babcock 

OF WISCONSIN 

Monday, June 8, 1896 



Mr. BABCOCK. Mr. Speaker, under the leave which has been granted by 
the House, I desire to maice some practical observations on silver and money, 
and especially on the proposition that the United States should open its mints 
to the gratuitous and unlimited coinage of silver at the rate of IG to 1. 

And in doing this I can best express my views in a simple and easily un- 
derstood manner by adopting as my own a conversation on the subject on 
three evenings between Mr. Smith, a practical business man and careful 
student of finance; Mr. Jones, an intelligent farmer; Mr. Vance, formerly a 
Greenbacker, now a Populist and silver man, and Mr. Burns, a common- 
sense laborer. 

EXTRACTS FROM 

♦» Three Evenings with Silver and Money "—A Talk of Four 
Neighbors about Silver and Money 



Third Evening 
"Looking Forward" 

ANOTHER POINT OF VIEW. 

Mf. JONES. Now, we as neighbors^ have talked this matter over pretty 
thoroughly. Last night I received a letter from a friend of mine in the 
Northwest, and with that letter he has sent me some figures and facts which 
I think will be of interest to us all. My friend is a hard-headed farmer. 
He is conservative and still enterprising; he is a good farmer, and last year 
bought eighty acres more land (running in debt, of course, for a portion of 
the purchase money), and is pushing along as well as he can in these hard 
times. His farm Ig tiear a town, which was growing rapidly in 1890, 
ISO'l, and 1892. They had put up a Woollen mill and a paper mill, besides 
several other manufacturing plants, and as usual in these Western towns, 
they had borrowed money for all of these enterprises, and had pledged 
the future with bonds to enable them to open new streets, build sidewalks, 
put in water, gas, electric lights, and a line of street cars. From a sleepy 
country village it had grown under the inspiration of the tariff law of 1890 
into a brisk town, affording a large market for all the farm products in that 
vicinity. The Wilson-Gorman bill struck them below the belt; the mills 
have shut down, and they are in bad shape. This situation of affairs has 
caused him to study the situation from his point of view, and if you neigh- 
bors are sufficiently interested to desire to hear these, we might meet some 
other evening at the schoolhouse, and invite the other people of the commu- 
nity, and see what he has to say. 



Mr. BURNS. That will be a capital idea. This is a big country; we 
are all interested in this subject, for what helps one portion helps all, and 
the same causes work out identical effects in every portion of this great 
country. 

Mr. SMITH. Yes, we are all vitally interested in getting- at the plain 
facts of this business, and we can't give it too much study or delibera- 
tion. What we want to arrive at is the truth — the plain truth and the 
whole of the truth. 

Mr. VANCE. Well, I have read Coin and a whole lot of literature 
published by the Mine Owners' Association and have got some radical ideas, 
yet I too desire to get at the facts. I have changed my views considerably 
during the three evenings we have been together, and I must say that while 
I am not prepared to abandon my original views, I have modified them con- 
siderably and become more anxiou.s to keep at this thing until I get down to 
bed rock. 

With this understanding they adjourned until the next Saturday even- 
ing. 

FROM THE STANDPOINT OF A NORTHWESTERN FARMER. 

They were all assembled in the schoolhouse on the Saturday evening 
appointed, and so lively an interest had all their neighbors in the question 
to be discussed that the house was packed full. 

Among the audience was a fair sprinkling of ladies, some of whom 
thought they ought to vote as well as the men, and all of them were inter- 
ested in hearing what some person in another portion of this country 
thought about the present condition of affairs. 

MR. BRO"WN'S LETTER. 

"MT DEAR JONES:— Tou know I was born down East, but that as a 
young man I struck out for the West, and have put in twenty years of hard 
work. I have eighty acres of land, one mile from town, all paid for. I 
have good buildings, teams, tools and supplies on hand to run me through 
a year. Last year I bought 80 acres more, which joins mine on the south, 
for $30 an acre. I only had $400 to pay down; leaving $2000 on which I had 
to pay 6 per cent, interest for three years. I don't suppose I can raise the 
$2000 at the end of that time, but I hope — if I have my health and good luck 
— to reduce it to $1000, and make a new loan for the balance, clearing that 
off in two years. I could have done this easily as things were a few years 
ago, but now, with the load of a two-thousand-dollar debt hanging over me, 
I shall have to plan carefully to come all right. Some of my neighbors are 
talking very strongly in favor of the free coinage of silver at 16 to 1, think- 
ing that would make a great change in the condition of affairs. My opinion 
is. however, that it is not so much a question of free silver as it is of busi- 
ness confidence and a protective tariff." 

MR. BROWN'S STATEMENT. 

Inclosed with his letter, Mr. Brown sent a paper which he had pre- 
pared, which Jones read at length. It excited so much interest and touched 
upon topics which were so important that it is given in full. 

Mr. JONEiS, after clearing his throat, said: This seems at first to be a 
conversation between Mr. Richard Poor and Mr. Peter Sail. 

The succeeding chapters describe Mr. Poor's discussions with several 
eminent persons, and the effect of such discussions on the audience. 

Mr. Poor seems to be an independent, fairly educated, level-headed la- 
boring man, w'ho has carefully saved some of his earnings, got himself a 



house and lot, and has several thousand dollars invested. The hard times 
have hurt him, but they have not brought him to utter want. Mr. Peter 
Sail is also a hard-working- man, but never g-ot so good wages as Poor. His 
wife had been sick a good deal, and other troubles had hindered his getting 
ahead so much in the world. In December, 1892, he had his little house and 
lot paid for and fairly furnished, and $300 in the bank. At the date of this 
statement his money had long since been gone, he had got in debt for liv- 
ing expenses, and had tramped for work month after month, and only a 
few weeks before had been obliged to sell their little home to pay their 
debts, and had moved to a little rented house on the outskirts of the town. 
He now had absolutely no resources, and had it not been for Mr. Poor, who 
kindly risked loaning him money — to be repaid if he should ever get work- 
he and his family would have suffered for the necessaries of life. 

THE INDEX OF PROSPERITY. 

"The men who depend upon their daily toil for their daily bread," said 
Poor, "constitute the balance wheel in American commerce. There is no 
better index to the condition of a people than is indicated by the condition 
of the laboring men, known as wage-earners. They are more adversely af- 
fected by depressions and stagnated business than any other of our popula- 
tion. Talk about the amount of money in a country indicating prosperity! 
There is nothing in that. It is the amount of money that reaches the pocket 
of the poor that makes a country prosperous. If all the money in the world 
were dumped upon American soil it would not be beneficial except in so far 
as it reached the pockets of the poor. It would only be beneficial in so far 
as it enabled our people to buy more of the necessities and comforts of life. 
If it should go into the hands of the people who have plenty it would fail 
to benefit any one. It would not make a heart happy nor increase the con- 
suming ability of our people. So I say in the broad sense of the term it 
would not be beneficial." 

Poor here took a piece of white paper out of his pocket and with a lead 
pencil quickly drew two reservoirs, and, continuing, said: "This reservoir 
represents a healthful condition of business. It shows the money in circula- 
tion, going from the capitalist to the farmer and wage earner, and from 
them to the capitalist again. This represents prosperity. The laborer is 
prosperous because he has work and is getting his part of the money of the 
country. The farmer is prosperous because, when money is circulating and 
the wage earners are all employed at good salaries, he has a larger demand 
for his products; and with an increased demand goes higher prices. 

, THE NATIONAI. MONEY IS CONGESTED. 

"Now," continued Poor, "this other drawing represents the country when 
the money is not circulating properly. Money is the blood of the nation. 
When the bloods fails from any cause to circulate in any member of the hu- 
man body, that member must perish. It can not live. 

"Well, now," continued Poor, "the same is true of the members of our 
nation. The farmers and laborers are the main members upon which our 
nation to-day stands. In this drawing you will observe the money— the 
blood— is not circulating among the farmers and wage earners' as it should. 
They can not stand that long. They must soon perish, and with them our 
nation, unless we can get the circulation revived. 

"This money is congested, just as the blood would be in the body if it 
should cease to circulate in the legs and arms. There is just as much 
money in the country as ever, but the poor do not get it. When this condi- 
tion prevails it is common to hear people say money is scarce, and that 
there is little money in the country, when they really mean that it is not 
circulating. 



"I heard a man say the other day that to increase the amount of money 
in the country to $50 per capita would bring- prosperity. What do you think" 
of that as a means for relief? 

"Suppose," said Poor, "all your blood should rush toward your heart and 
cease to circulate in your limbs. Suppose a doctor would propose to cure 
you by driving- the blood from about the heart and compelling it to circu- 
late throughout the whole system, revivifying every member and particle 
of the body. Suppose then another doctor would propose to bring relief by 
injecting into the body more blood. Now, between these two doctors 
which would you choose as your physician, under the circumstances? 

"The one who would make the blood circulate, of course. I would have 
no assurance that if I emploj^ed the other doctor the blood would circu- 
late after he injected it into my body. 

"Before talking about increasing the volume of money let us first force 
into circulation the money we have. 

MUST MAKE MONEY CIRCULATE. 

"We must manage some way to compel the money to circulate. What 
I mean by circulation is passing among the masses. Money piled up in 
the vaults of the rich is not circulating- at all. It is hoarded and is doing 
no one any good. To increase the amount so hoarded does not put any 
more in circulation. The problem to be solved is not how to increase 
the amount of money in the country, but how can we give to labor its just 
rewards and keep in circulation the money we now have. How can we give 
to the poor their share of our present volume." 

HOME vs. FOREIGN LABOR— A CONVERSATION. 

Poor went over one afternoon to see how Pete was getting along". He 
was pleased to find Mrs. Sail imiproving rapidly. It being a warm day and 
there being several in the house Poor and Pete went out and sat down on 
the grass in the shade of a tree. After they were comfortably seated Pete 
began the conversation by stating that his wife w^ould soon be well again, 
and he would like to find work, and inquired of Poor about the prospects, of 
finding any. 

"I don't know," said Poor, "where you can find work at present; but 1 
hope the mills will start again soon." 

"Poor," said Pete, "I have been thinking of this matter of work ' ever 
since I saw you at the bank. I have also been more impressed with the idea 
that 'the people are with us, and would help us if they only knew how to go 
about it. What has been worrying me is what to do. What do we need? 
What will give us v/ork? WTiat will bring happiness and prosperity to our 
land? I am free to confess I see noway out. The future to me Is dark." 

'It is well," said Poor, "for us to inquire what ails us. We are out of 
employment. That much we know. How can we get it and what will be 
the best for the country are the things to be considered. 

DO ALL OF THE WORK. 

"Pete," continued Poor, "if you were idle a good part of the year, and 
there were things you needed, would it be better for youi to make them dur- 
ing the time you would be idle, or would it pay you to buy them and do 
nothing part of your time? If you could make the articles as good as any 
one else, and you would put in your spare hours making them, would you 
not be worth more at the end of the year by reason of having saved your 
money and supplied your wants by your own labor?" 

"I most certainly would," replied Pete. "I would be worth just as 
much more as the articles made would have cost." 



"Then," said Poor, " if there are articles the people of this country can 
produce, and there are idle men to produce them, would it not on the same 
principle, be to the interest of our country to have our idle men employed sup- 
plying- the wants of the people and saving- the money that would otherwise 
be sent abroad? Every dollar's worth of goods made in this country adds 
that much to our national wealth. It adds the same amount to the wealth 
of the men who produce them. If wc had all our idle men employed, just 
think what an enormous amount of wealth would be added annually to 
our country. The amount of money sent abroad, if kept here and paid to 
our own workmen, would increase the wealth of the country to that extent 
every year. It would also increase the individual wealth of the men who 
would do the work. The beauty of that increase, Pete, is that it is among 
the poor. It increases their wealth, and that is the only way I know to 
increase the wealth of the poor. If you could increase the value of the prop- 
erty of the nation it would only benefit the property owner-3, and especially 
the rich, and the poor would get very little advantage from such increase. 
A law which will give the poor work, though, is especially beneficial to them 
and adds almost exclusively to their wealth. 

CONVICT LABOR. 

"Pete, are we out of employment because there is no work?" asktd Poor. 

"I think so," said Pete. 

"Well," said Poor, "let us see if that is correct. There were in 1890, 64,349 
convict laborers at work in the penitentiaries of the United States manu- 
facturing salable articles. Do you know what that means? The United 
States Commissioner of Labor, in his second annual report, in 1886, quotes 
a report of a commission to the Legislature of New Jersey on convict labor. 
'Every convict,' says this report, 'who makes any salable article does work 
that a free laborer might do, and therefore competes with the latter.' If 
every one of those 64,349 convicts does work that a free American might 
do they make work for just that many less free workmen. There are now 
about 70,000 convicts at work. If they were all stopped it would make a de- 
mand at once for about that number of free workmen. It does not seem 
right that one who has committed an offense and been put in the peniten- 
tiary should be so worked as to deprive a law-abiding- man of his means of 
livelihood. Shut off the competition of convict labor, and there will be work 
for about 70,000 more free workmen. That would be beneficial would it rot, 
Pete?" 

"Yes," said Pete, "but that would not supply the demand for work at 
the present time. It would be a good idea, though, to not permit convicts 
to do any work free labor would_ get were it not done by the convicts. I 
most heartily agree with you on convict labor." 

THE IMPORTED PAUPER. 

"There are tens of thousands of foreign pauper laborers coming to our 
shores yearly," said Poor. "They seek work in our mills and factories. 
They take work from that many Americans. Now, Pete, would it be bene- 
ficial or detrimental to the American wage earners to have all the work, 
and stop this constant drain from other countries? If it were stopped, 
would it make more or less work for our own workmen? If it would 
make more work it would be beneficial, would it not? If beneficial, why 
not make an effort to restrict immigration?" 

"If we could abolish convict labor," said Pete, "and prohibit foreign 
pauper Immigration, it would give quite an impetus to labor. It would 
cause an increase in wages, and give to at least a million people addition- 
al necessities of life." 



IMPORTED GOODS. 

'*Tes; but hold oh; I am not through yet," interposed ^oor. "You will 
agrree with me that every dollar's worth of work that can be done by the 
hom.e workmen should be g^iven to them. The people of the United 
States require about 6,000,000 wag-e earners to do their work; that is, 
make the manufactures, work the mines, build the houses, repair the ma- 
chinery, and do all the work hired done. There are just about that num- 
ber of wage earners in the country. Now, if we let 70,000 convicts do such 
work, and thera are tens of thousands of foreign paupers coming here 
annually, in a few years there would be hundreds of thousands of Ameri- 
can workmen in idleness and their families in want. It must always 
be remembered that every man has about three depending upon him for a 
living-. One hundred thousand idle men means 400,000 people living with- 
out the necessities of life which our higher civilization demands. How- 
erer important the questions of convict labor and foreign immigration may 
be, they fade into insignificance when compared to a more stupendous 
wrong which our people are now suffering." 

Pete here unconsciously opened his mouth and gazed at Poor as though 
he were unfolding to him all the v/isdom of the universe. Poor noticed 
how interested Pete had become and "Vv^as rather amused at the expression 
on his face. He did not allow that to interrupt him, however, but went 
on: 

"We are employing, to supply the demand of the United States, over 
a million foreigners who never saw the sun rise on American soil, who 
never saw America, who never pay one cent of tax to support the Govern- 
ment, and who sp'end their money for Indian and Russian wheat, for South 
American and Cuban tobacco, and for Australian wool and sheep. We pay 
them annually for that work more than $600,000,000. 

Pete's mouth opened wider and his eyes seemed larger as Poor said this. 

"Yes," said Poor, "we bring into this country annually work done by 
foreigners amounting to about $600,000,000, and yet there seems to be 
no concerted action on the part of the labor organizations to check it. 
The labor organizations will meet and resolute against convict labor, which 
Involres the work of 70,000 men, and will pass unnoticed the importation 
of foreign labor of more than 1,000,000 men. Every foreigner who makes 
any salable article for our market which could be made by us takes just 
that much work from our own wage earners. 

"Just think of it! A million foreigners employed by the American peo- 
ple! A million American v/orkmen turned out of employment and their 
families tasting all the bitter experiences of poverty and the degradation 
of pauperisna and tramping! When these poor wretches cry for relief 
resolutions are passed condemning convict labor and censuring the money 
power. Now, what we want is something practical. We want to take 
some concerted action in our own interest, prevent this large importati&n 
of foreign labor, make a demand for our work, put a million o^ idle men 
at work, and we will have a labor power controlling the affairs of our na- 
tion, and that much-discussed 'money-power' will be unknov/n. When there 
is plenty of work to do we can dictate terms; when millions of us are idle 
we have to take such terms as s-re offered." 

"Poor," said Pete, "I have heard a great many tell how to solve our 
present difficulties, but never before heard anyone suggest a remedy so 
practical and at the same time so easily secured." 

"There is to be a meeting to-night at the Grand Opera House," said 
PooK, "for- the purpose of considering this very question. I hope you will 
be present." 

After bidding Pete good day Poor went home. 

8 



THE LECTURE. 

The Grand Opera House was filled when the meeting was called to or- 
der at 8 o'clock. Several thousand people were present, anxious to ad- 
vance, if possible, the cause of the working- people. Nothing stirs up 
greater enthusiasm than a discussion designed for the betterment of hu- 
manity in general and the poor in particular. This meeting was not a gath- 
ering of partisans to discuss party issues, but was a gathering of citi- 
zens, regardless of party, to discuss questions calculated to elevate the 
masses. ^ 

After the proper organization of the meeting the chairman introduced 
Poor as the speaker, who said: 

"Mr. Chairman and fellow-workmen: This is my first attempt tO' talk 
in public. I do not claim to be an orator, but shall endeavor to say a few 
words to the point, and try to stir the working people to greater activity 
in their own interest. 

OUT OF EMPLOYMENT. 

"Here we are to-night without employment, hunting w^ork, families 
in need, children out of school, grov/ing up in ignorance, and we are do- 
ing without all the luxuries and many of the necessities of life. Some of 
our fellow-workmen and th^ir families are actually at the point of starva- 
tion. 

" 'No work,' did I hear some one say? Is that the reason we are idle? 
Is that the reason we are here seeking relief? No, that is not the reason. As 
I was saying this afternoon to my friend Pete Sail, who I ani pleased to see 
is present, the Am.erican people sent to foreign laborers for work over 
$600,000,000 last year. We had during that year over 1,000,000 foreign- 
ers working for us. Now I need a suit of clothes. I must have it, 
too. I cannot make it, so I will have to buy It. If I buy it here I give 
that much money to the workingmen. If I buy a suit made in Europe I 
deprive the American workmen of just that amount of work and money 
necessary to produce it on this side of the Atlantic. Yet that's just 
what we did last year and are doing this. Why do we do it? Why were 
1,000,000 foreigners working for the United States last year? Why did 
we send them over $600,000,000 for work? Why ape we doing the same 
thing at the present time? If all the people of this nation had all the 
work they could do it would be all right; or if they could not do that kind 
of work, then there would be nothing wrong in sending out of the coun- 
try to have it done. Were all of our v/orkingm.en employed the whole of 
the year? Were there no Americans who wanted the work? Were there 
no idle men in the country? If idle, why idle? It was not because there 
was no work to do, was it? No, that could not be, for at the yery time you 
were idle we were employing this horde of foreign vandals. Vfhy, then, 
were we employing them when we needed work so badly ourselves? There 
is but one answer, and that is incontrovertible; it is because the foreign- 
ers worked cheaper than the Americans would. There are some Ameri- 
cans who are so unpatriotic, care so little for their fellow-men, worship 
their money to such an extent they will let our o-^yi people suffer and send 
their money to Europe for the products of labor becaiise it will buy a lit- 
tle more there than here. We must either work a« cheaply as the work- 
men of other countries do, and sell the products of our labor as cheaply 
as they do, or we must prevent them from selling their labor and its pro- 
ducts in our market. I want in this connection, to ask you wage earn- 
ers this question: If there were American workmen who were unemploy- 
ed, and whose families were in need, would it not have been ^r better 



to have had them at work and receiving this money that was leaving the. 
country, even though the purchaser would have paid a little more for 
the products of their labor than he would have had to pay for the pro- 
ducts of the labor across the water? Would it not have been just and 
right to have given them that work at fair wages? (A voice, 'Of course it 
would!') My friends, would it not have been to the interest of every wage 
earner in the country? (A chorus of voices shouted, 'Yes!') 

AN ORGANIZATION. 

"How many wage earners are there present who will agree to buj'- 
nothing made by foreign workmen if it could be made by our own labor? 
And who will agree to patronize no merchant who buys foreign-made 
goods that could be made at home? And who will agree to join an organ- 
ization to prevent the importation of any products of foreign labor to sell 
in competition with the labor of our own people?" 

"We will all agree to that," said a voice. 

"I want to see if you will," said Poor. "All of you who are in favor 
of such an organization, please rise to your feet." Every man in the house 

rose to his feet except Professor W . "You may be seated," said 

Poor. 

THE BUSINESS MAN'S WAY. 

"The reason that I am so in earnest," continued Poor, "is that public 
opinion and local custom are not strongly in favor of the rights of the 
poor workingman. You notice the business and professional men of any 
town. They do not like for the people of that town to go to some other 
place to trade or procure professional services. - One of you wage earners 
go to a neighboring city and buy some goods because they are cheaper 
than they are at your home town, and hear how your merchant will cen- 
sure you and how public opinion will condemn you for not patronizing 
your home merchants. Then notice the merchants of your town when 
they buy a stock of goods. Instead of buying goods made by the work- 
ingmen of their town, or even of the United States, they will buy goods 
made by workingmen in England. They will permit the American and 
home wage earners to starve. What, then, will public opinion say to the 
merchants? Will it censure and condemn them for buying the work of 
the Europeans rather than Americans? No; it will commend them for 
their enterprise in so doing, and the citizens of the town will even encour- 
age them by buying the foreign-made goods. 

"Suppose one of you laborers should go to your town merchant and 
say, 'Mr. Merchant, we can buy everything a great deal ckeaper in a 
neighboring town than we can from you. It would be to your interest for 
us to go to that town to trade and not buy anything you have for sale.' 
What would the merchant say to you for presuming him to be such an 
ignoramus?* He would ask you if you took him to be a lunatic or a fool, 
and would probably apply the toe of his shoe to the seat of your pants by 
way of emphasis. When that merchant or anybody else tells you working- 
men how you would be benefited by letting into this country the products 
of foreign labor, I know of no better argument for you to use on such 
persons than the toe of your shoe applied to the seats of their pants with 
neatness and dispatch. 

THE ARGUMENT. 

"Persons who will maintain such a preposterous proposition must be 
beyond tjj© reach of reason and argument. 

JO 



THE REMEDY. 

" 'What are we going to do about it,' did I hear you say?" contiued 
Poor. "I will ask you if you want the work? That is the first thing to be 
determined. If you do not want it for yourself, do you want it for your 
fellow-men? If you do, it can be very easily secured. Let us form this 
organization I have mentioned, and work for the levying of a duty on all 
articles which we can manufacture sufficiently to supply the demand. Let 
us make that duty high enough to prevent the importation of any such pro- 
ducts." 

Professor W , the noted orator, politician, and free-trade advocate, 

here rose and said: "Mr. Speaker, I would like to ask a question." 

"Go ahead," said Poor. 

"In what way," said the Professor, "and on what articles would you 
levy that duty?" 

"I would levy it," said Poor, "upon such articles as can be made at 
home, and would let In free those articles we cannot produce." 

"Why would it not be better," queried W , "to reverse that, and let 

in free of duty those things we can make and put the duty on those we can 
not?" 

THE TWO PRINCIPLES. 

"Your question," replied Poor, "involves a discussion of the underlying 
principles of levying duties on imports. I will show you what effect these 
two modes of levying duties would have upon the country, and will let these 
workingmen before me decide which mode they prefer. Tea, coffee, and 

other articles we cannot produce, you, Professor W , would levy a duty 

upon. That would increase their cost to the consumer, to these working- 
men, to the extent of that duty. They would have to pay it if they bought 
any of those imported goods. That would add to their burdens and increase 
the price of those necessities of life to the extent of the duty placed upon 
them. What compensation do you offer, then, for this additional hardship? 
After you have increased the price of these necessities, what do you do 
with the products of our labor? Do you make provision so that we may 
sell the products of our labor at an advance equal to the increased price 
of those things we have to buy? No, you do the reverse. The things our 
workingmen can make you let in free. You do this so they cannot charge 
any more than the Englishman would sell them for. You say to them, 'We 
want work done, and unless you will do it as cheaply as the foreigner we 
will let the foreigner have the contract.' That means a reduction of about 
half in wages. In other words, you increase the price from about 40 to 60 
per cent, on all our workmen have to buy, and at the same time decrease 
the price of what they have to sell about 50 per cent. Then you ask me 
why the duty should not be levied in that way." (Applause.) 

THE RIGHT WAY. 
Poor was interrupted by the shuffling of feet and a low talking near the 
door. He stopped speaking, and looking in the direction of the noise ob- 
served Hon. Grover Fogg pressing forward through the dense crowd toward 
the speaker. When Fogg got near the speaker, some one, recognizing the 
important individual, got up and gave him a seat. Order being restored, 
Poor proceeded: "Here is the way I would levy the duty. You working- 
men are entitled to all the work you can do. I would put a duty on such 
work so high that no foreigner could deprive you of a dollar's worth of it. 
(Applause.) I would make it so high that English workmen could not regu- 
late your wages. After giving to you all this work I would let in free of 
duty all articles you had to buy. The trouble with your plan, Professor 

11 



W , is that it reduces the income of the wag-e earners about half, and at 

the same time doubles their burdens. You take the money from the very 
class of people who can least afford to lose it, and decrease those in- 
comes which affect most adversely the interest and prosperity of the 
country. It is like taking blood from the human heart. It is taken from 
the most vital and dangerous place. 

THREE OBJECTIONS. 

"Your plan, briefly stated, has three very objectionable features," con- 
tinued Poor. 

"First. It would allow huaidreds of millions of dollars to be taken 
directly from our wage earners and paid to the wage earners of other 
lands for the products of their laboff". 

"Second. It would only allow our workmen to charge for the work left 
for them English prices, which would be about half their present wages. 

"Third. After taking hundreds of millions of dollars' worth of work 
from them and reducing their pay half for the remaining work you would 
add an increased burden by increasing the prices of the articles they can- 
not produce." 

PROFITS OF CAPITAL. 

"Would not your plan enable the manufacturers to make large profits?" 
interrupted the Professor, feeling greatly encouraged by the appearance of 
his chief, Grover Fogg. 

The profits of manufacturers was one of W 's hobbies, and he thought 

if he could draw Poor out on that line of argument he would be able to get 

the better of the discussion. Professor W is a man of a good deal of 

conceit anyway, and just required such a man as Poor to let some of it out 

of him. After W took his seat Poor looked at him and said: "Suppose 

the manufacturers do make profits, I have no objection to that. We should 
not be deprived of our work and our means of support, and our families 
pauperized because some one else would make a profit out of our employ- 
ment. We would prefer to have the Ameriican rather than the English 
capitalists make the profits anyway. Then, the profits of our manufactur- 
ers are not as great as their enemies would have people believe. Money- 
is always seeking paying investments. There is pienty of idle capital in the 
country and plenty of money to loan at 3 and 4 per cent, per annum. If 
there are such large profits in manufacturing, why do not some of these 
men who make it a rule to condemn all manufacturers put some of their 
wealth into factories, reduce the price of goods, and become public bene- 
factors? Why do people loan millions of money at such low rates of interest 
if there is such a bonanza in maunfacturing? Profits are no higher in this 
country than in England, and no higher in protected than in unprotected 
industries." 

The Professor's face turned red and he appeared to be restless. Poor, 
looking at W — ■—, continued: "Professor, reason is against your position.* 
Some people, though, will not take reason for anything, so I will give you 
some authority. The first witness I will call to answer your question will 
be the Hon. William E. Gladstone, of England. In the North American Re- 
view for January, 1890, he said: 'No adversary will, I think, venture upon 
answering this by saying that the profits are larger in protected than in 
unprotected industries; first, because the best opinions seem to testify that 
in your protected trades profits are hard pressed by wag-es— a state of things 
very likely to occur, because protection, resting' on artificial stimulants, 
tends to disturb and banish all natuial adjustment.' Mr. Gladstone further 
says; 'As result of increased wages in the United States your shipbuilders 

12 



do a small trade with a large capital instead of doing, as before, a large 
trade with a relatively small capital.' You will notice Mr. Gladstone ad- 
mits that wages in protected industries are up pretty well to the selling 
price of the manufactured article, and leave little to the manufacturer for 
profits. He argues against a high duty because it increases wages, and a 
person cannot do as much business — that is, buy as much work with a 
given amount of money — as he could formerly under a low duty. In other 
words, muscle, bone, blood, and manhood have increased in price until it re- 
quires a large amount of money to do a small business. This he complains 
of. 

"Another witness I desire to call is the statistics of the United States, 
which show that 73 cotton manufactories in the States of Maine, New York 
and Massachusetts have been paying dividends of not to exceed 3.69 per 
cent, per annum on the amount actually invested. The factories in other 
lines have made no greater profits. In fact, there are perhaps. 50,000 idle 
factories in the United States to-day. Is it to be supposed that these 
factories would be idle if they could be making profits? These thousands 
of silent factories tell a story about profits which needs no comment." 

ENGLISH AND AMERICAN WAGES. 

"I maintain," said Professor W , "that wages are not higher in the 

United States tha^ in England. It may be that our workingmen make 
more money during the year than the English do, but it is because they 
work faster and are paid by the piece. The Englishmen get as much per 
piece as the Americans do, do they not, Mr. Speaker?" 

"This," said Poor, "is the stock argument of persons maintaining your 
side of this question. I want to show you the falsity of it, so you will never 
repeat it. It is one of the most Ingenious arguments you produce; yet it is 
no argument. It is simply an assertion. Can the American blacksmith or 
carpenter do more work than the Englishmen following either of these 
trades? The English carpenter gets $7.50 per week, the American $15. 
Can the American engineer, who gets $21 per week, run )iis engine faster 
than the Englishman, who gets $10? Can the American laborer, who gets 
$8 per week, do more v/ork than the Englishman, who gets $4.10? These 
prices show the relative amount paid for wages in these two countries. The 
difference indicated in the wages mentioned is maintained through all oc- 
cupations. 

THE SENATE REPORT. 

"Perhaps the highest authority in the world on this question," continued 
Poor, "is the report of a committee of the United States Senate. That com- 
mittee was composed of persons entertaining different views on the ques- 
tion, and had to assist it some of the ablest statisticians in the world. Af- 
ter a thorough investigation the committee came to the unanimous conclu- 
sion that wages in the United States are 77 per cent, higher than in Eng- 
land. That is higher authority than your assertion, Mr. W ." 

W dropped his head and seemed to be in deep meditation. 

Poor continued: "But you may not be satisfied yet, Professor, so I will 
show you conclu-sively that wages are higher here than abroad. 

IMPORTED WAGES. 
"We import yearly," said Poor, "several hujidred million dollars' worth 
of foreign work, pay the cost of transporting it from Europe to America, 
pay from 40 to 60 per cent, duty, and yet get it as cheaply as the American 
workmen will sell their products. Now, if labor is not cheaper in England, 
how do they pay all this cost to get into our market and still undersell our 
products? 

13 



GLADSTONE SAYS. 

"It seems to me," continued Poor, "that I have presented sufficient ar- 
gument to convince any one that our wages are higher than the English 
wages. I desire, though, to put Mr. Gladstone after you again. Professor. 
He says, 'The American rate of wages is higher than ours, I concede.' Can 
you, in the face of all this authority, have any doubt which country has 
the higher rate of wages? I put all this proof against your bare asser- 
tion." 

Professor T\" did not look up, but continued to gaze on the floor and 

seemed to long for a hole through which he could drop out of Poor's sight. 

GROVER FOGG RISES. 

Fogg — the impulsive, self-important, and petulant Fogg — rose to his feet 

and attempted to assist his bosom friend W out of the difficulty he hai 

gotten himself into. Fogg is a lawyer by profession and belongs to that 
class known as "bulldozers." As long as everything goes Fogg's way he is 
all right, but is very easy to become discouraged and is likely to leave his 
friends or clients in the thickest of the battle. He is not much on the 
fight himself; he prefers a substitute. He never loses an opportunity, 
though, to inflict his own opinion upon those present. This probably ac- 
counts for his great reputation of being such a shrewd man. When Fogg 
rose perfect silence prevailed throughout the hall. Poor's friends wondered 
if he could hold his own with Fogg. After standing a few seconds and 
looking around over the audience, to make sure they all saw him, Fogg 
said: "May I answer a question you asked a while ago?" 

"You have my permission," said Poor. 

"You asked this question," said Fogg. " 'If we levy a duty upon im- 
ported articles we cannot produce, and threby increase the price of them, 
in what way would we compensate the laboring man for this great burden?' 
That question was not answered by any one, and I desire to answer it 
now. Our workingmen would be fully compensated by giving them all the 
American products for about half the present prices. That is all the com- 
pensation any reasonable man should ask." Fogg looked around at the 
crowd, walled his eyes up, run his fingers through his long bushy hair, and 
sat down. 

Jim Giles, who sat near him, became so amused at Fogg's actions that 
he laughed right out. 

"That is your answer, is it?" said Poor, smiling. 

"Yes, sir," responded Fogg. 

A BOON OFFERED. 

"That," continued Poor, "is great encouragement. It is indeed a great 
boon to offer these men the products of their own labor for half the 
present prices. You, Mr. Fogg, do not understand what these plain work- 
ingmen want. They do not want to be pauperized, nor do they want to 
give the products of their labor away, nor do they want the price of them 
decreased one-half, or any other amount. You offer them the same thing 

Professor W did. That is, increase the prices of the necessities of life 

they have to buy and decrease the price of what they have for sale. I 
guess, Mr. Fogg, your plan is not acceptable to them." (Cries of "No! 
No'.") 

Fogg's sensitive, impulsive nature could not very well stand such an 
outburst of disapproval. He took it as a personal insult to his royal 
highness, and, taking his hat in his hand, started toward the door. The 
crowd, though, was so dense he could not get out, so he sat down again, 

14 



THEY AGREE ONCE. 

"Mr. Poor," said W- , who now felt still more encouraged since Fogg had 

entered the arena to assist him, "I am opposed to letting foreign pau- 
pers or any other foreign workmen come to this country. I am a friend 
to these working people, and, as I view it, to prohibit foreign immigra- 
tion is the only way we can give them immediate relief." 

"Now," said Poor, "I am real glad you go so far in my direction. But 
why do you favor keeping out foreign paupers?" 

"So as to give the work to our own people," replied Mr. W , in a 

somewhat more confident tone. 

"A good idea," said Poor. "Now, W , if a foreigner comes here and 

works, is he or his labor detrimental to our wage earners?" 

"It is his labor, of course," replied W- . 

"Then, if they come here," said Poor, "and do not work they will not 
throw anyone out of employment, will they?" 

"No," said the Professor, hesitatingly. 

"Suppose again, Mr. W ," continued Poor, "that the products of for- 
eign labor be sold in our market. Before you could say whether that la- 
bor was detrimental to our wage earners you would have to investigate 
and learn where the work was done. (Great laughter and applause.) If 
you should find that the foreigners did the work in New York or Chicago, 
it would be a national calamity, but if they worked in England and sent 
their labor over here in the form of finished products it would be a nation- 
al blessing. As for my part, Mr. W , I think the foreigner who works 

and sells the products of his labor in our market brings as much desti- 
tution to our people when he works in London as when he v/orks in New 
York, and as much when he works in Paris as when he works in Chicago. 
It makes no difference where the man is, it is the products of his labor 
we are opposed to having in our country; and it is the products of his 
labor we desire to keep out. See the fallacy of your position! If a 
million foreign workmen were on their way to America, you will concede 
that if landed they would take work from that many of our own people, 
and spread destitution and financial ruin throughout our land. That 
same number of men are at work every day across the ocean and selling 
the products of their labor in our market. You pay no attention to that. 
You are unconcerned about a million foreigners working for us in other 
lands, and then express great anxiety about a few thousands who come 
over here. 

"But why, I say, are you in favor of keeping out pauper laborers? If 
we should import, say, 3,000,000 paupers from European nations who 
would work for less than half the wages our workmen get, it would make 
everything cheaper, would it not? That is what you say would be a 
blessing to the country — cheaper goods. If cheaper goods are so desir- 
able, why not offer an inducement for foreigners to come over here and 
work? It would be just as detrimental to our working people to have 
manufactures cheapened by importing foreign goods as it would to import 
the foreigners and let them make the goods here." 

Professor W saw that Poor had shown his inconsistent position in 

advocating restricted immigration, and at the same time letting in unre- 
stricted the labor of foreign workmen. He was very anxious to change 
the subject. 

THE MANUFACTURERS IMPORT PAUPERS. 

"Mr. Poor," said W , rising to his feet and appearing more nervous 

than before, "do you not know it to be a fact that these manufacturers you 

15 



are upholding import Eng-lish laborers to displace our own workmen in 
their mills and factories?" 

"Do you know it?" asked Poor. 

"Yes, sir, I do," said Professor TV , emphatically, and at the same 

time striking the tahl* with his fist. 

"Mr. W ," said Poor, "you have now admitted what you awhile 

ago denied." W here dropped his head again as if looking to the floor 

for some inspiration. 

Poor went right on: "You said labor is no cheaper in England than 
in the United States. You now say these manufacturers import English 
laborers. That admits that they can get English laborers cheaper, or 
they would not import them. It also admits that they are not only cheap- 
er per day but cheaper per piece, or else why would the manufacturers 
want them? Your intimation that I am working in the interest of the 
manufacturers is not well founded. It is, in fact, not true, except in so 
far as our interests are identical. The organization I suggest is to pre- 
vent these manufacturers from importing cheap laborers and to keep such 
persons as you from importing the products of cheap labor. I am work- 
ing for the elevation of the workingmen and for bettering their condi- 
tion. The fact that my plan would benefit others than wage earners is 
all the stronger argument in its favor. I have nothing but contempt for 
these little fellows who go around condemning prosperity, thrift, and the 
powers of acquisition. I like to see everyone prospering. The fact that 
some are becoming rich is an encouragement for others to try. Abrahg.m 
Lincoln, in 1S64, said: 'That some may be rich shows that others may be- 
come rich, and hence is just encouragement to industry and enterprise. 
Let him not who is houseless pull down the house of another, but let him 
labor diligently and build one for himself, thus by example assuring that 
his own shall be safe from violence when built.' " 

Poor here stated that he would now proceed to organize a club for the 
protection of the working people. The object of the club was briefly stated 
in the paper which he asked them to sign. It was as follows: 

"We, the undersigned, agree to wopk for the interest of American labor 
and American industries in the following waj's: 

"First. We will buy no goods made in foreign lands if they could be 
made in America. 

"Second. We will patronize no merchant who handles foreign-made 
goods that could be made by our own people. 

"Third. We will vote for no man for office who is not in favor of pre- 
venting pauper immigration, and who is not in favor of prohibiting the im- 
portation of ail products of foreign labor which would compete with the 
products of American labor." 

After Poor read this to the audience he asked all wtio were in favor of 
organizing a club on these principles to come forward and sign the paper, 
thereby enrolling themselves as members. The crowd rushed forward to 

sign the paper and shake Poor's hand. Every person present except W 

and Fogg signed the paper. The meeting then adjourned. All who heard 
the lecture pronounced it one of tlie most practical talks they ever listened 
to. 

Wlien Jones stopped reading there was a very marked sensation among 
his auditors. 

As he sat down Vance rose to his feet and said: "Friends and neighbors, 
I came here to-night to learn things, not to listen, and while listening, 
keep thinking up things to answer with. Mr. Jones has thrown a vivid 
light on some things which I never saw plainly before. He has not got 

16 



quite through with the statement. I notice there are a few more pages, and 
if j^ou people will not mind I will read them to you myself." 

Old Squire Brown rose and said: "I am glad to hear such frank remarks 
from neighbor Vance. Sometimes those who hold different ideas will not 
listen to reason or be convinced. He shows an earnest desire to get at the 
underlying basic -principles. If all our friends will be equally frank and sin- 
cere, this campaign will settle for once and all for this generation what we 
need to have done. Go ahead, Mr. Vance." 

UNITED ACTION NEEDED. 

This is what Vance said: 

"Poor. Each individual interest would be injured if not ruined by free 
trade. And you go over the country advising the people to strike down 
each other's industry. You advise the stockmen to destroy the fruit busi- 
ness, the tobacco raisers to destroy the stock business and the stockmen 
to destroy the tobacco industry. You go to the agriculturists, as a class, 
and advise them to destroy the manufacturing industries and reduce the 
wages of the laboring men. You, then go to the non-producers, the capitalists 
and moneyed men, the m^anufacturers and wage earners, and explain to 
them how much cheaper they could get their food products by removing the 
duty and letting them in free. You incite the farmers against the wage 
earners and try to get one to strike down the income and profits of the 
other. You are always trying to pick a quarrel, and are continually stir- 
ring up strife among the various industries of the country. Then you go 
around to each one separately and pretend to be his friend and want him to 
help you tear down everybody else. 'Oh, ye backbiters!' Why do you not 
be magnanimous and respect the efforts and enterprise of the toiling mil- 
lions"? Why do you not say to the people engaged in each industry that 
they must do nothing to lessen the profits of their fellow-workmen in other 
industries? Upon the success of others depends your success. It is only by 
the producers standing together as a body that they can hold their own 
against the greed and avarice of the times. 

"The man who will advise one part of the producers to work against an- 
other part is not only an enemy to the producing element of our country, 
but an enemy to the moral, intellectual and financial advancement which 
should characterize this people. 

WHEN WAGE EARNERS CAN BUY. 
"The wage earners, with their families,' continued Poor, "constitute 
about one-third of our population. They consume about one-third of the 
farm products. Now, if you redu-ce their income one-half they would only 
have half as much money to spend upon farm produce. They must then do 
one of two things: they must buy farm produce cheaper, or they must buy 
only half as much as heretofore. They cannot well live on half as much as 
they have been accustomed to, but would be compelled to do so unless they 
could buy it cheaper. Should the farmers refuse to reduce the price of 
their produce, it would entail hardships and suffering upon the wage 
earners an(| their families, which I am sure you do not want to see. The 
wage earners consume about one-half what the farmers sell. If their in- 
comes are decreased to such an extent that they can buy only as much farm 
produce as formerly the farmers would have a large surplus of such prod- 
ucts left on their hands. What would the farmers do v/ith that surplus? 
The wealthy class buy all they need at present, and would buy no more if 
the farmers had ever so large a surplus. The foreign markets are fully sup- 
plied and they could find no market there. Then, on the other hand, if you 
should sell the wage earners your farm products 50 per cent, cheaper than 
you have been selling them, you would have to sell the wealthy cIpss their 

17 



part at the same price. Every reduction in wages, you see, must be fol- 
lowed by a corresponding- reduction in tlie price of farm produce. 

"Let me illustrate to you how that works. Suppose A, B and C to be a 
manufacturer, stockman and farmer, respectively. B has 10,000 sheep from 
w'hich he gets 50,000 pounds of wool which he sells A at 20 cents per pound, 
or $10,000 for all. The increase of the flock we will suppose is worth $20,- 
000 annually, making his total annual income $30,000. Then, to feed his 
flock will require 10 bushels of com per head, or 100,000 bushels annually. C 
has 2500 acres of land from which he raises 100,000 bushels of corn. He 
sells this to B at 20 cents a bushel, or $25,000. C employs 65 laborers on 
his farm, paying- them annually $350 each, or $22,850 to all. Now, we will 
supose the manufacturer can buy Australian wool at 10 cents per pound. 
B'l must sell his at that price. Then, instead of getting $10,000 for his wool 
he will only get $5000. Since wool has depreciated 50 per cent, sheep must 
have depreciated the same. B's income will be reduced to $15,000 instead 
of $30,000, and he can therefore pay only half as much for corn. The farmer 
can only get 121/^ cents for corn, which would make his annual income $12,- 
500 instead of $25,000. The farmer could not afford to pay the laborers more 
than half as much as formerly, so their income would be reduced from $22,- 
850 to $11,425. "VS^henever 3^ou reduce the income of any class of people the 
blight is carried to all business enterprises, and they all share equally in 
the loss. 

WHAT ARE RAW MATERIALS ? 

"Raw materials," said Poor, "is an indefinite expression. There is very 
little raw material, in one sense of the term. In fact, nothing is abso- 
lutely raw material except the mineral and ore lying in the ground un- 
touched and those things which have not been enhanced in value by 
labor. Cotton is the finished product of the farm and the raw material of 
the manufacturer. Cloth is the finished pro-duct of the factory and the raw 
material of the tailor shops. As the term is generally used, I think I under- 
stand your meaning. I believe it is generally understood to include all pro- 
ducts in the condition to be taken to the factory for fabrication or comple- 
tion into a useful commodity. With that understanding of the meaning 
of raw materials, I will say that to admit them free would have the same 
effect as admitting all articles free. You have heard it said that free raw 
materials would give more work to our workingmen. If the raw materials 
were broug^ht in from other countries, the labor of producing them, at 
least, would be taken from our laborers. Our manufacturers in 1890 used 
over $5,000,000,000 worth of materials. The factories turned out over $9,- 
000,000,000 worth of finished products. Over half of the cost of our manu- 
factures, then, is for raw materials. These raw materials represent labor, 
and our workingmen get more for the raw materials than they do for mak- 
ing- those materials into the finished products. It requires more men to 
produce them, too, than it does to make the materials and make the manu- 
factured article. To take the production of raw materials from our. people 
would work a greater injury to labor and affect adversely more people than it 
would to take from them the fabrication of those materials into the finished 
articles. The men who are at work producing them are just as lieserving of 
protection as any other part of the people. If you throw out of employment 
the millions engag-ed in producing raw materials, they will seek the fac- 
tories for employment, which will bring about a deficiency of work and a 
surplus of workers. This would reduce all wages. You cannot throw out 
of employment a large body of wage earners nor reduce their wages with- 
out affecting all wage earners adversely. Wages seek a level as natu- 
rally as water. You had just as well try to lower the water in one-half 
of L^ke Michigian without lowering it in the other half as to try to lower 

18 



the wag-es of one-half of the wage earners without lowering- the wages of 
all, or to try to lessen the income of a large part of- the producers without 
lessening- the income of all producers correspondingly. 

CUT THINGS IN TWO. 

"If you can succeed in persuading" the farmers to cut wages in 
two you can then very easily persuade the wage earners to cut the 
price of farm products in two. The free trader would stand back and 
witness such a slaughter no doubt with a feeling of gratification and 
pleasure. 

"Then, again, what would be g-ained by free raw materials? After 
paying the money for producing them tO' peoples of other countries what 
would we g-ain and what compensation could we offer to the wage earners 
of our own country? It is claimed that free raw material would enable us 
to sell our manufactures in other countries. How it would help us in 
that direction is one of the unsolved mysteries. It is one of the absur- 
dities peculiar to a free-trade discussion. Suppose, for instance, that we 
let raw materials in free and our manufacturers can buy them as cheap 
as the Eing-lish manufacturer can. Our manufacturer buys some raw ma- 
terial. An Eng-lish manufacturer buys the same amount. Each buys in the 
open markets of the world and pays exactly the same price. The Eng- 
lishman makes of his material a certain kind of manufactures and pays 
for labor, say, $100,000. The American manufacturer makes exactly the 
same kind of commodities the Englishman made and pays for labor $177,- 
000. Now, the American commodities have cost $77,000 more than the 
English commodities. The question that has always puzzled me is how the 
American manufacturer can send his goods to England or anywhere in the 
markets of the world and undersell the English manufacturer whose arti- 
cles cost so much less for labor. This, I say, is one of the unsolved mys- 
teries. There is only one way for our manufacturers to go into the mar- 
kets of the world and sell their wares and merchandise. That is for them 
to pay less for labor than the manufacturers of the rest of the world pay. 
If you workingmen are anxious for your labor 'to. sell in compeitition 
with other labor, reduce your wages about 60 per cent, and try the ex- 
periment awhile to see if you like it. If you do not like it, increase your 
wag-es and sell your labor in the American market, and have a law to 
prevent foreign laborers from underselling you at' your own home. See 
that your own wages are not reduced, and then see that all other laborers 
are employed at good wa,^es. Then- there would be no one to take your 
place. See that all producers are making- profits, then observe the dollars 
now going- abroad turning into the pockets of the needy. See the activity 
in every branch of business! See the quick, elastic step of our people 
supplanting- the drowsiness and laggard movements of the present! See 
all men, at work, business revived as never before, money carrying its loads 
of blessings into every home in the land, making- happy hearts and cheer- 
ful faces, and showing its favor to the poor and needy instead of the rich 
and opulent! 

QUESTIONS AND ANSWERS. 

"Previous to 1873 we had the free and unlimited coinage of gold and 
silver at the ratio of 16 to 1, did we not?" 

"Yes." 

"In that last year, 1873, silver was worth 2 cents more on the dollar 
than gold?" 

"That is what it was." 

19 



"Why did not the free coinage of the two metals hold them at d, 
parity then if it would now?" 

"Are not Mexico, Russia and Japan free-silver countries?" 

"Yes." 

"Is not the gold dollar in Mexico worth twice as much as the silver 
dollar, and is not the gold ruble of Russia worth 77 cents and the silver 
ruble worth 37 cents; and the gold yen in Japan worth 99.7 cents, while 
a silver yen is worth only 50 cents?" 

"TTiose are facts." 

"Then why is it that in no free-silver country on the face of the globe 
do they keep their gold and silver money of the same value, but leave it 
so speculators can manipulate it at pleasure and feast upon the people 
like vultures?" 

"Give it up as a bad problem." 

SILVER AND V/AGES IN MEXICO. 
Poor picked up the Bulletin of the Bureau of American Republics No. 
9, 1891, and read as follows: 

"One of the greatest evils (referring to Mexico) at the present time is 
the existence of a scale of wages which defies all power of reduction, 
which robs the laborers of all the sense of dignity or feeling of association 
with the rest of their fellow-citizens, and, having reduced them to a condi- 
tion of abject abasement, deteriorates to like extent their productive power 
and the measure of their ability. They are content to regard themselves 
as a plant, or machinery which moves by extraneous aid only, and has no 
power of volition, and no desire to exercise it if it had. This is the condi- 
tion prevailing in silver countries. It has, under the guise of increased 
wages, been gradually sapping the very energy and manhood out of the 
poor. Wages has been forced up 20 per cent, in the number of dollars re- 
ceived, but in the actual purchasing power they have decreased 40 per 
cent. The laborer would each day take less of the necessities of life to his 
little fireside, and the condition of his family gradually became more 
wretched. Every pay-day the dollar received was not quite as valuable 
as at the previous. The money sharks smiled at the way they were stealing 
from the families of the poor. They paid their workmen as many or more 
aollars; therefore, the laborer should be thankful for the money received." 
"Suppose I should hire you to work for me," continued Poor. "I agree 
to pay you so much per month. I want to make a large profit out of your 
labor. I get the government to assist me in my scheme. The government 
puts metal (?f less value in the dollar each month and cheapens the money. 
I pay you in the cheapened money the same number of dollars I agreed to. 
You accept it and are satisfied, because it is the number of dollars you 
agreed to take. You wonder, though, why your wages do not buy any 
more. The trouble is I have been robbing you through the guise of law and 
have been assisted in my nefarious scheme by the government under which 
you live and for which you fight and, if necessary, give your life. That 
country is robbing you by forcing upon you a depreciated money. Would 
our great government to be a party to such infamy? 

"Xo," continued Poor, "our great government would do nothing of the 
kind. It is founded upon justice and right and seeks to protect the weak 
from the strong. It says to the rich and wealthy: 'I will regulate the 
value of the money, and I will see that every dollar is just as valuable as 
every other dollar; and you shall not, under the guise of philanthropy, 
rob the poor and reduce their wages without their knowing it. You shall 
not pretend to be giving them more when the amount you are giving them 
is in fact worthless.' " 

20 



Vanoe's reading- of Poor's remarks had occupied nearly half an hour, 
and at its close he seated himself with the air of one wh© has given his 
neighbors a deal of valuable information. ^ That this opinion was shared 
by the audience was evidenced by the hearty vote of thanks which was 
extended to him, to Mr. Jones for bringing the paper, and to their far- 
away fellow-workman and producer, whose words had come to them that 
night with the conviction which plain, substantial facts, told in a matter- 
of-fact way, always bring to the practical mind. 

Just before the meeting broke up Vance said (and it is to be hoped that 
all others of his manner of thinking- will give the subject the same careful, 
painstaking study which he has given it, and that at least a large portion 
of them may see their way clear to reach a similar conclusion): 

Mr. VANCE. I have been on the Populist band wagon for some five 
years. This is a selfish world, and up to a certain point we are all governed 
directly by motive® of personal expediency. "When war comes we have 
patriotic fervor and impulses, and, of course, we would all fight and spend 
our money freely for the maintenance of our common country. But so 
long as the country is not in immediate danger our acts and votes and our 
opinions, are likely to be shaded in a great degree by what we fancy 'will be 
of personal benefit to us. 

I owe $1,000 balance of purchase money on my farm — I have been owing- 
it for fifteen years. I . had got the idea that the $1,000 balance which was 
going- to Widow Smith, from whom I purchased the place, was worth a 
good deal more than when I made the purchase. All that sort of arg-ument 
has been fully disproven by what we learned during our three evenings, 
and to-nig-ht's experience has simply clinched that opinion. 

We have discussed the alleged crime of 1873, and shown fully that it 
was. a plain business proposition, which was fully discussed through five 
years of Cong-ress and given entire publicity, and accepted as a matter of 
course as the then present condition, and as not subject to criticism. 

In concluding I wish to say to my neighbors, and through them to all 
others, that whatever is rig-ht and just oug-ht to prevail. We are a great 
nation, and to the peoples beyond the seas our civilization and civil liberty 
are a beacon, a watchword, and an Inspiration to the toiling masses every- 
where. Understanding this condition and appreciating- our responsibility 
not only to ourselves but to all mankind, we must place the flag- of our 
country and the honor and credit of our nation at the top of the mast and 
maintain American liberty, American labor and American honor untar- 
nished. 

Our laws afford the widest liberty and the greatest opportunity for hon- 
est toil. We must see to it that our labor and our products are protected, 
and at the same time we must firmly resolve to steadfastly maintain that 
the dollar of the workingman, the dollar of the farmer, the dollar of the 
merchant, and the dollar which conies into the pockets of every man, 
woman and child in all this mighty country is as g-ood as the best — and 
good as the best not only for to-day, but for to-day one year, and five 
years; that it shall not be subject to discount, but that it shall pass cur 
rent in every mart and for every purchase and for every payment where- 
ever our flag may wave. 

There was loud and hearty applause when Vance, after making- what 
was for him a very long speech, took his seat. For a moment each one 
was busy talking with his immediate neighbor, approving the general 
trend of Vance's remarks. A few rose to go; but at that moment they no- 
ticed the stocky, sturdy, well-built form of B^rns moving toward the area 
in front of the rostrum, and evidently fulf of some remarks which he 
wished to deliver. In a moment he began nervously fingering his hatband 

n 



and explaining that he was more used to handling tools than pens, and more 
used to exercising the muscles of his arms and legs than his vocal organs. 
The following, in substance, is what he said: 

Mr. Burns. I have been studying this whole problem for some months, 
and have looked at it from the standpoint of the man whose capital resides 
in the muscles of his arms and legs and back, in a good eyesight, in a rea- 
sonably clear head, and in the employment of all these adjutants In making 
for himself, in any branch of industry, a fair day's work. I feel that I can 
speak, not only for myself, but for all those who work by the day or the 
month or the year and whose capital is impaired when we are sick and 
whose interest ceases to run the day we are out of work. President Lin- 
coln said once that you can fool all the people part of the time and a part 
of the people all of the time, but that you could not fool all the people all 
the time. 

Tou remember back in the seventies that we had a greenback craze, 
and good men went wrong trying to make fiat money enrich everybody — 
trying, in fact, to hoist themselves over the fence by tugging at their 
boot straps. Some very good men went off on this greenback cra^e, but 
most of them who had plenty of gray matter sooner or later came back. 
I remember that all of the Democrats egged on the greenback proposi- 
tion. They pointed it oUt to the workihgmen as a sure way to universal 
wealth. But greenbackism is dead, dead as a coffin nail. The only trou- 
ble, however, is that from its ashes springs up another theory equally 
pestilent, equally harmful to all the people. From the ashes of greenback- 
ism sprung the Democratic project of free trade in 1892 that was to make 
everything cheap to the laboring- man and bring about the millennium. In 
1896 We see the same old enemy — the devil with a different suit of clothes 
on, his horns covered up, his tail roiled carefully under his coat, and a 
new quadrennial smile on his face — blandly assuring the workingmen who 
stand idle with empty dinner pails before closed factories that it is all a 
mistake; that it was not free trade that did it; and that if it was he now 
has a new and improved and certain sure cure for this campaign — that 
is, free silver. - 1 think if we are hoodwinked again we would deserve a 
modification of that famous remark of Lincoln's. We were fooled in 
1892. It is well for us to resolutely set our faces against being fooled 
again in 1896. 

The Democratic party seems to me to assume the guise of that scrip- 
tural wicked individual. He clamored for free trade four years ago. Now 
he points eagerly toward free and unlimited free coinage of silver at the 
ratio of 16 to 1. Possibly four years hence he may come up again smiling 
and demand a free and untrammeled entrance into his own dominions. 



» 



BFPyBUCi MF 




AND 



Gbaipman Tharston's ftddress 

St Louis Convention, June 18, 1896. 



FROM THE REMARKS OF 

HON. J. S. SHERTV^KN, 

OK NEW YORK:. 
In the House of Representatives, 

WASHINGTON, D. C. 



Krom Congressional Record, June 30, 1806 



REPUBLICAN FliATFORM. 

Tbe Republicans of tlie United Statea, assembled by tbeir representa<« 
tives in national convention, appealingr for tbe popular and bistorical 
justification of tbeir claims to tbe matcbless acbievements of tbe 
tbirty years of Republican rule, earnestly and confidently address 
tbemselves to tbe awaltened intelligence, experience, and conscience 
of tbeir countrymen in tbe follOTving; declaration of facts and prin- 
ciples: 

For tbe first time since tbe civil -war tbe American people bave 
Witnessed tbe calamitous consequences of full and unrestricted Demo- 
cratic control of tbe Governuient. It bas been a record of unparalleled 
Incapacity, disbonor, and disaster. In administrative management it 
has rutblessly sacrificed indispensable revenue, entailed an unceas- 
Ingr deficit, eked out ordinary current expenses with borro-«ved 
money, piled up tbe public debt by $202,000,000 in time of peace, 
forced an adverse balance of trade, kept a pei-petual menace banipinn 



over tlie redemption fund, pavrned American credit to alien syndi- 
cates, and reversed all tlie measures and results of successful Republi- 
can rule. 

In tlie broad effect of its policy it bas precipitated panic, bligbted 
industry and trade witb prolongred depression, closed factories, re- 
duced Tvorlc and wases, baited enterprise, and crippled American 
production, wbile stimulating foreign production for tbe American 
market. Every consideration of public safety and individual interest 
demands tbat tbe Government sball be rescued from tbe bands of 
tbose vrbo bave sbOTFu tbemselves incapable to conduct it Tvitbout 
disaster at borne and disbonor abroad, and sball be restored to tbe 
party wbicb for tbirty years administered it Tvitb uneotTialed success 
and prosperity, and in tbis connection -^ve beartily indorse tbe 'wis- 
dom, patriotism and tbe success of tbe Administration of President 
Harrison. 

TARIFF. 

We rencTv and empbasize our allegiance to tbe policy of protection 
as tbe bulTvark; of American industrial independence and tbe founda- 
tion of American development and prosperity. Tbis true American 
policy taxes foreign products and encourages borne industry; it puts 
tbe burden of revenue on foreign goods; it secures tbe American 
market for tbe American producer; it upbolds tbe American standard 
of T^'ages for tbe American wox'kingman; it puts tbe factory by tbe 
side of tbe farm, and makes tbe American farmer less dependent on 
foreign demand and price; it diffuses general tbx-ift, and founds the 
strengtb of all on tbe strength of eacb. In its re.isonable application 
it is just, fair, and impartial; equally opposed to foreign control and 
domestic monopoly, to sectional discrimination and individual favor- 
itism. 

We denounce tbe present Democratic tariff as sectional, injurious 
to tbe public credit, and destructive to business enterprise. We de- 
mand sucb an equitable tariff on foreign imports vs-bicb come into 
competition witb American products as Trill not only furnisb adequate 
revenue for tbe necessary expenses of tbe Government, but -*vill pro- 
tect American labor from degradation to tbe wage level of otber 
lands. W^e are not pledged to any particular schedules. Tbe question 
of rates is a practical question, to be governed by tbe conditions of 
tbe time and of production; the ruling and uncompromising principle 
is tbe protection and development of American labor and industry. 
Tbe country demands a right settlement, and then it Trants rest. 

RECIPROCITY. 

We believe tbe repeal of tbe reciprocity arrangements negotiated by 
tbe last Repiiblican Administration Tras a national calamity, and we 
demand their rene-vral and extension on sucb terms as ivill equalize our 



3 

trade -vritli otlier nations, remove tlie restrictions wliicli now obstruct 
the sale of American prodncts in the ports of other countries, and se- 
cure enlarged marliets for the products of our farms, forests and fac- 
tories. 

Protection and reciprocity are twin measui-es of Republican policy 
and so hand in hand. Democratic rile has recklessly struclt dovrn both, 
and both must be re-established. Protection for what we produce; free 
admiission for the necessaries of life w^hich we do not produce; reci- 
procity agreements of mutual interests w^hich gain open markets for 
us in return for our open markets to others. Protection builds up do- 
mestic industry and trade, and se'ures our own market for ourselves; 
reciprocity builds up foreigrn trade and finds an outlet for our sur- 
plus. 

SUGAR. 

We condemn the present Administiation for not keeptngr faith with 
the sugar producers of this counti -r. The Republican party favors such 
protection as w^ill lead to the production on American soil of all the 
sugar which the American people use, and for which they pay other 
countries more than $100,000,000 annually. 

WOOL AND WOOLENS. 

To all our products— to those of the mine and the fields as -well aa 
to those of the shop and the factory— to hemp, to wool, the product of 
ihe jrr« at industry of sheep husbandry, ns w^ell as to the finished w^o4<]- 
ens of the mills — we promise the most ample protectioiu 

MERCHANT MARINE. 

We favor restoring the American policy of discriminating duties 
for the upbuilding of our merchant marine and the protection of cur 
shipping in the foreign carrying trade, so that American ships— the 
product of American labor, employed In American shipyards, sailing 
under the Stars and Stripes, and manned, oflicered and owned by 
Americans— may regain the carrying of our foreign commerce. 

FINANCE. 

The Republican party is unreservedly for sound money. It caused 
the enactment of the la-w providing for the resumption of specie pay- 
ments in 1879; since then every dollar has been as good as gold. 

W^e are unalterably opposed to every measure calculated to debase 
our currency or impair the credit of our country. We are, therefore, 
opposed to the free coinage of silver except by international agree- 
ment with the leading commercial nations of the world, ^vhich we 



pledge ourselves to promote, and until sncli ag'reement can be obtained 
the existingr gold standard must be preserved. All our silver and 
paper currency must be maintained at parity witb gold, and we favor 
all measures designed to maintain inviolably tbe obligations of tbe 
United States and all our money, vrbetber coin or paper, at tbe present 
standard, tbe standard of tbe most enligbtened nations of tbe eartb. 

PENSIONS. 

Tbe veterans of tbe Union Army deserve and sbould receive fair 
treatment and generous recognition. "W'benever practicable tbey 
sbould be given tbe preference in tbe matter of employment, and tbey 
are entitled to tbe enactment of sucb la-vrs as are best calculated 
to secure tbe fulfillment of tbe pledges made to tbem in tbe dark: 
days of tbe country's peril. "We denounce tbe practice in tbe Pension 
Bureau, so recklessly and unjustly carried on by tbe present Adminis- 
tration, of reducing pensions and arbitrarily dropping names from tbe 
rolls as deserving tbe severest condemnation of tbe American people. 

FOREIGN RELATIONS. 

Our foreign policy sbould be at all times firm, vigorous and dig- 
nified, and all our interests in tbe Western Hemispbere carefully 
vratcbed and guarded. Tbe Hawaiian Islands sbould be controlled by 
tbe United States, and no foreign power sbould be permitted to inter- 
fere vritb tbem; tbe Nicaraguan Canal sbould be built, ow^ned and op- 
erated by tbe United States; and by tbe purchase of tbe Danisb Island* 
vre sbould secure a proper and mncb-needed naval station in tbe West 
Indies. 

ARMENIAN MASSACRES. 

Tbe niassacres in Armenia bave aroused tbe deep sympathy and Just 
indignation of tbe American people, and vre believe that the. United 
States should exercise all tbe influence it can properly exert to bring 
these atrocities to an end. In Turkey American residents bave been 
exposed to tbe gravest dangers and American property destroyed. 
There and everyvrbere American citizens- and American property must 
be absolutely protected at all hazards and at any cost* 

MONROE DOCTRINE. 

We reassert tbe Monroe doctrine in its full extent, and Tve reaflB.rm 
the. right of tbe United States to give tbe doctrine effect by respond- 
ing to the appeal of any American State for friendly Intervention in 
case of European encroachment. We bave not interfered and shall not 
interfere with tbe existing possessions of any European poTver in this 
faemispbere, but these possessions must not on any pretext be extended. / 



We hopefully look for^vard to tlie eventual Tritliclravral of tlie Euro- 
pean poTvers from this liemispliere, and to tlie ultimate nnion of all 
Bngrlisli-speakiagr parts of tlie continent by the free consent of its in- 
habitants. 

CUBA. 

From the honr of achieving their own independence the people of 
the United States have regarded Tvith sympathy the struggles of other 
American people to free thexuselves from European domination. "We ■ 
^vateh TFith deep and abiding interest the heroic battle of the Cuban 
patriots against cruelty and oppression, and our best iiopex go out f<*r 
the full success of their determined contest for liberty. 

The Government of Spain, having lost control of Cuba, and being 
unable to protect the property or lives of resident American citizens, 
or to comply -with its treaty obligations, yve believe that the Govern- 
ment of the United States should actively use its influence and good of- 
fices to restore peace and give independence to the island. 

THE NAVY. 

The peace and security of the Republic and the maintenance of its 
rightful influence among the nations of the earth demand a naval 
poTTer commensurate Tvith its position and responsibility. We there- 
fore favor the continued enlargement of the Navy and a complete sys- 
tem of harbor and seacoast defenses. 



FOREIGN IMMIGRATION. 

For the protection of the quality of our American citizenship and 
of the -wages of our workiiigmen against the fatal competition of low- 
priced labor, -we demand that the immigration laws be thoroughly en- 
forced, and so extended as to exclude from entrance to the United 
States those vrho can neither read nor w^rite. 



CIVIL SERVICE. 

The civil-service law was placed on the statute book by the Re- 
publican party, which has always sustained it, and we renew our re- 
peated declarations that it shall be thoroughly and honestly enforced 
and extended Tvherever practicable. 



FREE BALLOT. 

We demand that every citizen of the United States shall be allovred 
to cast one free and unrestricted ballot, and that such ballot shall be 
counted and returned as cast. 



LYNCHINGS. 

TTe proclaim our ananalified condemnation of the uncivilized and 
barbarous practice, tfcU knoirn as lyncbing or killing: of buman beings 
suspected or cbarg^ed Tritb crime, Tv^itbont process of la-vr* 

NATIONAL ARBITRATION. 

We favor tbe ci-eation of a national board of arbitration to settle 
and adjust differences Tvbicb may arise bet-ween employers and em- 
ployees engragred in interstate commerce. 

HOMESTEADS. 

We believe in an immediate return to tbe free-bomestead policy of 
tlie Republican party, and urge tbe passage by Congress of a satisfac- 
tory free-bomestead measure sucb as bas already passed tbe House, 
and is now pending in tbe Senate. 

TERRITORIES. 

We favor tbe admission of tbe remaining Territories at tbe earliest 
practicable date, baving due regard to tbe interests of tbe people of 
tbe Territories and of tbe United States. All tbe Federal officers ap- 
pointed for tbe Territories sbould be selected from bona fide resi- 
dents tbereof, and tbe rigbt of self-government sbould be accorded as 
far as practicable. 

ALASKA. 

We believe tbe citizens of Alaska sbould bave representation in tbe 
Congress of tbe United States, to tbe end tbat needful legislation 
may be intelligently enacted. 

TEMPERANCE. 

We sympatbize ivitb all wise and legitimate efforts to lessen and 
prevent tbe evils of intemperance and promote morality, 

RIGHfTS OF WOMEN. 

Tbe Republican party is mindful of tbe rigbts and Interests of 
Tvonien. Protection of American industries includes equal opportuni- 
ties, eq.ual pay for eq.ual TTorlc, and protection to tbe bome. We favor 
the admission of women to wider spberes of usefulness, and -welcome 
tbeir co-operation in rescuing tbe country from Democratic and Popu- 
list mismanagement and mis-rule. 



Sucb are tlie principles and policies of tlie Republican party. By 
tbese principles we will abide and tbese policies we will pnt into exe- 
cution. We omU for tbem tbe considerate judgment of tbe American 
people. Confident alike in tbe bistory of our great party and in tbe 
justice of our cause, we present our platform and our candidates in 
the full assurance tbat tbe election will bring victory to tbe Republi- 
can party and prosperity to tbe people of tbe United States* 



CHAIRMAN THURSTON'S ADDRESS. 

Gentlemen of tbe Convention: Tbe bappy memory of your kindness 
and confidence -will abide in my grateful beart forever. My sole an&bi- 
tion is to meet your expectations, and I pledge myself to exercise tbe 
important po-wers of tbis bigb office -«vitb absolute justice and impar- 
tiality. I bespeak your cordial co-operation and support to tbe end 
tbat our proceedings may be orderly and dignified, as before tbis bave 
been tbe deliberations of tbe supreme council of tbe Republican 
party. 

Eigbt years ago I bad tbe distinguisbed bonor to preside over tbe 
convention w^bicb nominated tbe last Republican President of tbe 
United States. To-day I bave tbe distinguisbed bonor to preside over 
tbe convention Tvbicb is to nominate tbe next President of tbe United 
States. Tbis generation bas bad its object lesson and tbe doom of 
tbe Democratic party is already announced. Tbe American people w^lll 
return to tbe Republican party, because tbey know tbat its adminis- 
tration will mean— 

Tbe supremacy of tbe Constitution of tbe United States. 

Tbe maintenance of tbe la-w and order. 

Tbe protection of every American citizen in bis rigbt to live, labor, 
and to vote. 

A vigorous foreign policy. 

Tbe enforcement of tbe Monroe doctrine. 

Tbe restoration of our mercbant marine. 

Safety under tbe Stars and Stripes on every sea, In every port. 

A revenue adeauate for all governmental expenditures and tbe grad- 
ual extinguisbment of tbe national debt. 



MEANS A SOUND CURRENCY. 

A cnirency as sound as Government and as nntarnished as its lionor^ 
Tvliose dollars, wlietlier of grold, paper, or silver, sliall liave ea^al 
pnrcliasins and debt-payingr poTver -^vitli the best dollars of the civ- 
ilized TForld. 

A protective tariff Trliicli protects, conpled -^vitli reciprocity -wliicli 
reciprocates, thereby secnrin^ tbe best markets for Annerican products 
and opening of American factories to tbe free coinagre of American 
muscle. 

A pension policy just and generous to our living beroes and to tbe 
vyidoTvs and orpbans of tbeir dead comrades. 

Tbe STOvernmental supervision and control of transportation, lines 
and rates. 

Tbe protection of tbe people from unla-wful combination and unjust 
ex-action of asgrregated capital and corporated poTver. 

An American vrelcome to every grod-f earing, liberty-lovingr, Consti- 
tution respecting, law-abiding, labor-seeking, decent man. 

Tbe exclusion of all -wbose birtb, wbose blood, wbose conditions, 
^vbose teacbings, wbose practices "?vould menace tbe permanency of free 
institutions, endanger tbe safety of American society or lessen tbe op- 
portnnities of American labor. 

Tbe abolition of sectionalism— every star in tbe American flag sbin- 
ing for tbe bonor and v>-e]fare and bappiness of every Coiamon- 
wealtb and of all tbe people. 

A deatbless loyalty to all tbat is truly American and a patriotism 
eternal as tbe stars* 



CULLOM ON SOUND MONEY, 

HONEST COINAGE. 



SFEEOH 

OF 

Hon. SHELBY M. CULLOM, 

OF ILLINOIS, 

In the Senate of the United States, Washington, D. C, June 1, 1896. 

Mr. CULLOM said: 

Mr. President: While I do not question the motive which prompted the 
introduction of the bill to prohibit the issuance of interest-bearing- bonds, 
yet I must confess that I am surprised that, under the circumstances, it 
should receive serious favorable consideration in this body. No one on this 
floor deplores more than I do the issue of interest-bearing obligations by this 
Government in time of peace and the piling up of debt at the rate of §100.- 
000,000 per year. But does any Senator imagine that the causes which made 
the issue of bonds necessary, and which may require further issues, can 
be removed by simply passing a bill prohibiting it? The consequences of the 
passage of the bill, if it shall become a law, to my mind, are so far-reaching 
as to be simply appalling. 

WAIVTING IX €OMMOX HONESTY. 

Mr. President, in my opinion, it would be the undoing of all that has been 
accomplished and built up since the passage of the resumption act in 1875. 
It would mean the repudiation of our obligations. Its tendency would be to 
place this country at once upon a silver basis, whatever that may mean. 
It would seriously endanger every business concern in the country which 
has weathered thus far the terrible financial storm that has prevailed during 
the last three years. It would throw out of employment hundreds of thou- 
sands of laboring men and women who have begun to hope that the dawn 
of brighter days is at hand. It Is wholly wanting in common honesty, and 
:would forever be a blot upon the page of American history. 



2 CULLOM ON SOUND MONEY. 

Mr. President, I agree with what the distinguished Senator from Ohio [Mr. 
Sherman] said a few days ago. 1 do not suppose any Senator bwlieves this 
bill will become a law. The Executive should never be deprived of the power 
given him by the act of January 14, 1875, which authorized his Secretary of 
the Treasury to " issue, sell, and dispose of, at not less than par in coin, 
either of the descriptions of bonds of the United States described in the act 
of July 14, 1870," unless upon the passage of another act giving the President 
and Secretary power to maintain the reserve and also to borrow money to 
meet any emergency on better terms. 

SH[OUI.I> GUARD AGAINST KATIONAI4 BISHOXOR. 

We have, during the present Administration, been confronted with an 
emergency which, in the judgment of the Executive, required the exercise of 
the authority vested in him by the act above quoted. And whatever money 
the President and the Secretary of the Treasury may have raised by the 
sale of bonds (whether judiciously raised or not) is not seriously claimed to 
have been unlawfully obtained. I have my own views as to the wisdom of 
the Executive action, but there is no doubt whatever of the lawful power 
of the President of the United States, with the Secretai-y of the Treasury, 
to sell or to provide for the sale of such evidences of indebtedness as they may 
deem necessary to effectuate the lawful policy of the Government. Mr. 
President, I shall be the last man to join in any trifling crusade against the 
official and personal integrity of the President. No Government should fail 
to guard against national dishonor. The United States cannot afford to 
permit such a condition of things as even to hazard or jeopardize its credit 
or its financial honor. 



PROTECT THE l^ATIOXAIi HONOR. 

General Grant, the great soldier and statesman, said in his first message, 
March 4, 1869: 

" To protect the national honor, every dollar of Government indebtedness 
should be paid in gold unless otherwise stipulated in the contract. That no 
repudiator of one farthing of our public debt will be trusted in public place." 

Such has always been the spirit and determination of the people. It is 
now proposed by this bill to prohibit the President from borrowing a dollar, 
no matter what may happen or what calamity may come upon the country. 
It is not only wrong, but it is a crime against the honor, security, and pros- 
perity of the nation. While the nation was struggling in civil war and 
groaning under the vast burdens of debt no word was ever officially uttered 
which had even the semblance of repudiation, and never was an attempt 
made to take away from the President the lawful power to make loans to 
protect the nation's credit. When General Grant, uttered the words quoted 
gold was at a premium of 38 per cent., as compared with paper money, and 
the interest on Government bonds wa« 6 per cent. The total interest-bearing 
debt was then $2,162,000,000. but the policy of the nation was sound money, 
a protective tariff^ and sufficient revenue. Under that policy the people 
prospered. We were not so great a nation then as we are now. Om* popula- 



eULLOM ON SOUND MONEY. 3 

tion was about 38,000,000, as against 72,000,000 to-day. Then the value of 
our personal and real property was about $30,000,000,000. In value this has 
increased until it now approximates $70,000,000,000. The injunction is still 
a^ imperative to be honest and maintain our integrity and credit as it has 
even been. 

But, Mr. President, it is not my purpose to discuss the bond bill at length, 
as it will not become a law. I desire to discuss briefly the financial or 
monetary question. 



AN INTERNA TION Ali AGREEMENT HOPED FOR. 

The financial exigencies of this country and the necessary relationship 
which exists between the monetary systems of the United States and of the 
other civilized nations of the world have of late years given rise to the hope 
of an international agreement in regard to coinage and coin values. The 
money metals all over the world are gold and silver, and nearly all the 
civilized nations are producers, in a greater or less degree, of these metals. 
The commerce of the world, under the stimulating influences of steam trans- 
portiition, electric communication, and other modern facilities, has been so 
modified in its character, ami the conditions affecting it have so radically 
changed in a few years, that any intelligent consideration of the commercial 
problem must include new factors and new influences. 

Our own territorial growth, unexampled as it has been, ought to demonstrate 
to us that other nations have grown, too. Our prosperity should remind us 
that other countries may prosper, too. What we, with our growth, intelligence, 
entei-prise, and push, may have had yesterday is to-day possessed by Australia, 
India, Argentina, and even South Africa. Our Kansas City, Omaha, St. Paul, 
Minneapolis, Denver, and Leadville have their counterparts in Melbourne, 
Bombay, Buenos Ayres. Johannesburg, and Kimberley. The discovery of 
precious metals in California and Colorado was but a precursor of similar 
discoveries in localities but recently emerged from barbaric control in tne 
South Sea Islands and in Africa, 



VIGOROUS COMPETITORS OF THE UNITED STATES, 

So to-day we find that these comparatively new colonies and countries are 
vigorous competitors of the United States not only in their agricultural 
productions, but in valuable mineral products as well. The competition which 
has already met our wheat growers, from the great new wheat fields of 
South America, as well as from Siberia and the Black Sea provinces of 
Russia, has made itself painfully felt. Our exports of domestic wheat (wheat 
and flour), which reached 225,000.000 bushels in 1892. have fallen off largely 
each year until in 1895 only 144,000,000 bushels were exported, thus showing 
a reduction of over 80,000,000 bushels in our annual wheat exports in a 
four-year period. The vast production of petroleum in southern Russia has 
operated very greatly to the disadvantage of American producers. The in- 
creased production and importation of foreign wool has caused a specific 
and unfavorable effect upon the wool producers of the Unit«d States. 



4 CULLOM ON SOUND MONEY. 

TRAI>£ REIiATIOXS ARE CONSTAi\TI.Y CHAXGIBTG. 

I cite these examples merely to show the extensive and constantly changing 
relations between distant countries, and the consequent changes in their 
trade and in their staple and important products. Commerce in the leading 
productions of these countries instantly responds to these variations and 
fluctuations, and is injured or benefited as the case may be. The laws of 
coinage in Australia or in Russia, or the extension or limitation of gold or 
silver circulation in other remote countries, may have either a beneficial or 
an injurious effect upon the most important commercial interests of the 
United States. 

Rri.E OR RUIX OF COMMERCE. 

I do not propose to take the time necessary to detail how certainly and 
how absolutely these distant and apparently distinct influences may rule or 
ruin the commerce of the United States. But I shall assume without ques- 
tion that the important interests of the world's trade and of international 
commerce are so affected by the operation of distant and distinct govern- 
mental policies that the necessity already exists for a harmonious interna- 
tional arrangement in monetary affairs. The world's production of precious 
metals and the world's coinage of the same have become important integers 
which cannot be overlooked in any study or discussion of the economic 
conditions surrounding any country of the world. Even now we cannot say 
that the stoppage or the increase of the metallic circulation in any one of 
the smaller nations may not, or will not, affect for good or bad the mercantile 
interests of the United States. 

VASTIiT INCREASED PRODUCTION OF SII^TER. 

The phenomenal fact that the world's production of silver, which had 
remained about stationary at thirty or forty million dollars annually for 
nearly a century, has of late vastly increased— and last year reached the 
wondrous sum of two hundred and sixteen millions— must necessarily produce 
some signal effects upon the varied interests of the newer commercial world 
which it would be mere presumption now to predict But it does seem to 
me that the only competent authority to consider the grave conditions newly 
created by reason of this phenomenal addition to the world's silver supply must 
be composed of representatives of the nations of the world. No one nation can 
determine the policy which shall be adopted by all, or for itself, without 
considering the policy of the others. There have been several monetary com- 
missions created, and monetary conferences charged with the duty of arrang- 
ing proper regulations to meet the exigencies existing at the various times 
in which they were called together. 

TIME FOR AN INTERNATIONAIi AGREEMENT. 

But the present seems to be the most appropriate time to press to a con- 
clusion and to an ultimate agreement between the great commercial and 
monetary nations the decision as to the wisest ratio between gold and silver 



GULLOM ON SOUND MONEY. 5 

to be made universal over the world. The reason for this urgency at the 
present time is the fact I have recited of the enormous production of silver 
which is forcing its way into the world's supply. Trade relations, as well 
as the conditions of domestic or internal trade, have been rudely interfered 
with by the injection into the supply of visible coinage material of two hun- 
dred and sixteen millions of silver per year. If this new average of supply 
shall become constant, or even continue for merely a few years, it must be 
provided for and looked after. 

PROBUCTIOW OF OOI^D AWI> SII.VER. 

To illustrate the existing conditions, I will here present in tabular form 
some facts regarding the production of gold and silver in the world. First, 
a table showing the production of gold and silver in the world from 187.5 
to 1894, inclusive; second, a table showing the amount of gold and silver 
annually coined in the world during the same period; third, a table showing 
the product of gold and silver in the United States from 1845 to 1894; fourth, 
a table showing the coinage of the United States mints from 1841 to 189.5; 
and fifth, a table showing the amount of money in the United States— gold, 
silver, notes^ etc.— and the circulation per capita annually from 1872 to 1895, 
inclusive: 

Production of gold and sil-cer in the world for the calendar years 1873-1894. 



Year. 


Gold. 


Silver. 


Fine 
ounces. 


Value. 


Fine ounces. 


Commercial 
value. 


Coining value 


1873 

1874 

1875..... 

1876 

1877 

1878 

1879 

1880 

1881 

1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 


4,653,675 
4,390,031 
4,716,563 
5,016,488 
5,512,196 
6,761,114 
5,262,174 
5,148,880 
4,983,742 
4,934,086 
4,614,588 
4,921,169 
5.245,572 
5,135,679 
5,116,861 
5,330,775 
5,973,790 
5,749,306 
6,320,194 
7,102,180 
7,608,787 
8,737,788 


$96,200,000 
90,750,000 
97,500,000 
103,700,000 
113,947,200 
119,092,800 
108,778,800 
106,436,800 
103,023,100 
101,996,600 
95,392,000 
101,729,600 
108,435,600 
106,163,990 
105,774,900 
110,196,900 
123,489,200 
118,848,700 
130,650,000 
146,815,100 
lo7,287,6(.0 
180,626,100 


63,267,187 

55,300,781 

62,261,719 

67,753,125 

62,679,916 

73,385,451 

74,383,495 

74,795,273 

79,020,872 

86,472,091 

89,175,023 

81,567,801 

91,609,959 

93,297,290 

96,123,586 

108,827,606 

120,213,611 

126,095,062 

137,170,919 

153,151,762 

166,092,047 

167,752,561 


$82,120,800 

70,674,400 

77,578,100 

78,322,600 

75,278,600 

84,540,000 

83,532,700 

85,640,600 

89,925,700 

98,232,300 

98,984,300 

90,785,000 

97,518,800 

92,793,500 

94,031,000 

102,185,900 

112,414,100 

131,937,000 

135,500,200 

133,404,400 

129,551,800 

106,522,900 


$81,800,000 

71,500,000 

80,500.000 

87,600,000 

81,040,700 

94,882,200 

96,172,600 

96,705,000 

102,168,400 

111,802,300 

115,297,000 

105,461,400 

118,445,200 

120,026 800 

124,281,000 

140,706,400 

155,427,700 

163,032,000 

177,352.300 

198,014,400 

214,745,300 

216,892.200 


Total.. 


122,235,638 


2,526,834,900 


2,130,397,137 


2,151,474,700 2,754,452,900 



COINAGE OF THE WORIiI> FOR 22 YEARS. 



Coinage of gold and silver of the mints of the world for the calendar years 1873-1894. 


Calendar year. 


Gold. 


Silver. 


Fine ounces. 


Value. 


Fine ounces. 


Coining value. 


1873 


12,462,890 
6,568,279 
9,480,892 

10,309,645 
9,753,196 
9,113,202 
4,390,167 
7,242,951 
7,111,864 
4,822,851 
5,071,882 
4,810,061 
4,632,273 
4,578,310 
6,046,510 
6,522,346 
8,170,611 
7,219,725 
5,782,463 
8,343,387 

11,243,342 

11,025,680 


$257,630,802 

135,778,387 

195,987,428 

213,119,278 

201,616,466 

188,386,611 

90,752,811 

149,725,081 

147,015,275 

99,697,170 

104,845,114 

99,432,795 

95,757,582 

94,642,070 

124,992,465 

134,828,855 

168,901,519 

149,244,965 

119,534,122 

172,473,124 

232,420,517 

227,921,032 


101,741,421 

79,610,875 

92,747,118 

97,899,525 

88,449,796 

124,671,870 

81,124,555 

65,442,074 

83,539,051 

85,685,996 

84,541,904 

74,120,127 

98,044,475 

96,566,844 

126,388,502 

104,354,000 

107,788,256 

117,786,228 

106,962,049 

120,282,947 

106,697,783 

87,472,523 

2,131,920,919 


$131,544,464 
102,931,232 
119,915,467 
126,577,164 
114,359,332 
161,191,913 


3 874 


1875 


1876 

1877 

1878 


1879 


104,888,313 


1880 


84,611,974 


1881 


108,010,086 
110,785,934 
109,306,705 


1882 

1883 


1 884 


95,832,084 


1885 


126,764,574 


1886 


124,854,101 
163,411,397 
134,922,344 
139,362,595 
152,293,144 


1887 


1888 ■ 

1889 , 

1890 


1891 


138,294,367 
155,517,347 


1892 .-. 


1893 


137,952,690 
113,095,788 


1894 


Total 


164,702,527 


13,401,703,469 


$2,756,423,015 



INCREASE OF AMERICAN PRODUCTION. 

Product of gold and silver from mines in the United States, 1845 to 1894. 



Calendar year. 



1845 
1846 
1847. 
1848. 
1849. 
1850. 
1851. 
.1852, 
1853 . 
1854 
1855. 
1856 
1857. 
1858 
1859. 
1860 
1861 
1862, 
1863 
1864 
1865. 
1866, 
1867. 
1868 
1869 
1870 
1871, 
1872 , 
1873. 
1874. 
1875, 
1876 



Gold. 



Fine ounces, 



48,778 
55,116 
43,009 
483,750 
1,935,000 
2,418,750 
2,660,625 
2,902,500 
3,144,375 
2,902,500 
2,660,625 
2,660,625 
2,660,625 
2,419,000 
2,419,000 
2,225,250 
2,080,125 
1,896,300 
1,935,000 
2,230,100 
2,574,759 
2,588,062 
2,502,197 
2,322,000 
2,370,375 
2,418,750 
2,104,300 
1,741,500 
1,741,500 
1,620,563 
1,615,725 
1,930,162 



Value. 



$1,008,327 
1,139,357 
889,085 
10,000,000 
40,000,000 
50,000,000 
55,000,000 
60,000,000 
65,000,000 
60,000,000 
55,000,000 
55,000,000 
55,000,000 
50,000,000 
50,000,000 
46,000,000 
43,000,000 
39,200,000 
40,000,000 
46,100,000 
53,225,000 
53,500,000 
51,725.000 
48,000,000 
49,500,000 
50,000,000 
43,500,000 
36,000,000 
36,000,000 
33,500,000 
33,400,000 
89,900,000 



Silver. 



Fine ounces 



38,672 

38,672 

38,672 

38,672 

38,672 

38,672 

38.672" 

38,672 

38,672 

38,672 

38,672 

38,672 

38,672 

386,720 

77,344 

116,016 

1,547,000 

3,480,000 

6,574,220 

8,510,000 

8,701,200 

7,734,400 

10,441,000 

9,281,250 

9,281,250 

13,000,000 

17,789,000 

22,244,100 

27,650,000 

28,849,000 

24,518,000 

30,009,000 



Commer- 
cial value. 



$50,196 

50,274 

50,583 

50,428 

50,622 

50,892 

51,704 

51,279 

52,130 

52,130 

51,985 

51,985 

52,333 

519,752 

105,188 

156,832 

2,062,151 

4,683,880 

8,842,326 

11,445,950 

11,642,206 

10,356,362 

13,865,648 

12,306,938 

12,297,656 

17,264,000 

23,588,214 

29,406,700 

35,750,000 

36,869,000 

30,549,000 

34,690,000 



Coining' 
value. 



$50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

50,000 

500,000 

100,000 

150,000 

2,000,000 

4,500,000 

8,500,000 

11,000,000 

11,250,000 

10,0(0,000 

13,500,000 

12,000,000 

12,000,000 

16,000,000 

23,000,000 

28,750,000 

35,750,000 

37,300,000 

31,700,000 

38,800,000 



Product of gold and silver from mine* in United States, 1845 io 1894. — Cont*d. 



Calendar Tear. 



1877. 
1878. 
!S79. 
1880. 
1881. 
1882. 
1883. 
1884. 
1885. 
1886. 
1887. 
3888. 
1889 



1890. 
1«91. 
]892. 
1893. 
1894. 



Gold. 



Fine 
ouuces. 



2.2(38,788 
2,476,800 
1,881,787 
1,741,500 
1,678,612 
1,572,187 
1,451,250 
1,489,950 
1,538,325 
1,693,125 
1,596,375 
1 ,604,841 
1,587,000 
1,588,880 
1,604,840 
1,596,375 
1,739,323 
1,910,813 



Value. 



$46,9.0,000 
51,200,000 
38,900,000 
36,000,000 
34,700,000 
32,500,000 
30,000,000 
30,800,000 
31,800,000 
35,000,000 
33,000,000 
33,175,000 
32,800,000 
32,845,000 
33,175,000 
33,000,000 
35,955,000 
39,500,000 



Silver. 



Fine 
ounces. 



30,783,000 
34,960,000 
31,550,000 
30,320,000 
33,260,000 
36,200,000 
35,730,000 
37,800,000 
39,910,000 
39,440,000 
41,200,000 
45,780,000 
50,000,000 
54,500,000 
58,330,000 
63,500,000 
60,000,000 
49,500,000 



Commercial 
Value. 



$36,970,000 
40,270,000 
35,430,000 
34,720,000 
37,850,000 
41,120,000 
39,660,000 
42,070,000 
42,500,000 
39,230,000 
40,410,000 
43,020,000 
46,750,000 
57,225,000 
57,630,000 
55,563,000 
46,800,000 
31,422,000 



Coining 
Value. 



139,800,000 
45,200,000 
40,800,000 
39,200,000 
43,000,000 
46,800,000 
46,200,000 
48,800,000 
51,600,000 
51,000,000 
53,350,000 
69,195,000 
64,646,000 
70,465,000 
75,417,000 
82,101,000 
77,576,000 
64,000,000 



HOW MUCH WE HAVE COINED. 

Coinage of the United States mints from 1841 to 1895. 
[From the Report of the Director of the Mint.] 



Calendar Year. 



1841 
1842 
1843 
1844 
1845 
1846 
1847 
1848 
1849 
1850 
1851 
1852 
1853 
1854 
1855 
1856 
1857 
1858 
1859 
1860 
1861 
1862 
1863 
1864 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 



Total Coinage. 



Gold. 



$1,091,857.50 
1,829,407.50 
8,108,797.50 
5,427,670.00 
3,756,447.50 
4,034,177.50 
20,202,325.00 
3,775,512.50 
9,007,761.50 
31,981.738.50 
62,614,492.50 
56,846.187.50 
39,377,909.00 
25,915,962.50 
29,387,968.00 
36,857,768.50 
32,214,040.00 
22,938,413.50 
14,780,570.00 
23,473,654.00 
83,395,530.00 
20,875,997.50 
22,445,482.00 
20,001,415.00 
28,295,107.50 
31,435,945.00 
23.828,625.00 
19,371,387.50 
17,582,987.50 
23,198,787.50 
21,032,685.00 
21,812,645.00 
57,022,747.50 
35,254,630.00 
32,951,940.00 
4G,:;79,452.50 
43,99: ,864.00 
40,786,052.00 



Silver. 



$1,132,750.00 

2,332,750.00 

3,834,750.00 

2,235,550.00 

1,873,200.00 

2,558,580.00 

2,374,450.00 

2,040,050.00 

2,114,950.00 

1,866,100.00 

774,397.00 

999,410.00 

9,077,571.00 

8,619,270.00 

3,501,245.00 

5,142,240.00 

5,478,760.00 

8,495,370.00 

3,284,450.00 

2.259,390.00 

3,783,740.00 

1,252,516.50 

809,267.80 

609,917.10 

691,005.00 

•982,409.25 

908,876.25 

1,074,343.00 

1,266,143.00 

1,378,255.50 

3,104,038.30 

2,504,488 50 

4,024,747.60 

6,851,776.70 

15,347,893.00 

24,503,307. 

28,393,045.60 

28,518,860.00 



Minor. 



115,973.67 

23,833.90 

24,283.20 

23,987.52 

38,948.04 

41,208.00 

61,836.69 

64,157.99 

41,984.32 

44,467.50 

99,635.43 

50,630.04 

67,059.78 

42,638.35 

16,030.79 

27,106.78 

178,010.46 

246,000.00 

364,000.00 

205,660.00 

101,000.00 

280,750.00 

498,400.00 

926,687.14 

968,:52.86 

1,042,960.00 

1,819,910.00 

1,697,150.00 

963,000.00 

350,325.00 

99,890.(0 

369,380.(0 

379,456.00 

342,475.00 

246,970.00 

210,300.00 

8,526,00 

68,186.50 



Total. 
$2,240,581.17 
4,185,991.40 
11,967,830.70 
7,687,207.52 
5,668,595.54 
6,633,965.50 
22,638,611.69 
6,879,720.49 
11,164,695.82 
33,892,306.00 
63,488,524.93 
57,896,228.44 
48,522,539.78 
34,577,870.85 
32,905,243.79 
42,027,116.28 
37,870,810.46 
31,679,783.50 
18,429,020.00 
25,938,704.00 
87,280,270.C0 
22,409,264.00 
23,753,149.80 
21,618,019.24 
29,954.665.36 
33,461,314 25 
26,557,411.25 
22,142,880.50 
19,812.130.50 
24.927,368.00 
2-1,236,613.30 
24,(186,513.50 
61,426,950.10 
42,448,881.70 
48,546,803.00 
71,293,560.00 
72,401,434.50 
78,363,088.50 



8 eULLOM ON SOUND MONEY. 

Coinage of the TJnited States mints from 1841 to 1895 — Continued. 



Calendar year. 



1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 



Total Coinage. 



Gold. 



$39,080,080.00 
62,308,279.00 
96,850,890.00 
65,887,685.00 
29,241,990.00 
23,991,756.50 
27,773,012.50 
28,945,542.00 
23,972,383.00 
31,380,808.00 
21,413,931.00 
20,467,182.50 
29,222,005.00 
34,787,222.50 
56,997,020.00 
79,546,160.00 
59,616,357.50 



Silver. 



$27,569,776.00 
27,411,693.75 
27,940,163.75 
27,973,132.00 
29,246,968.45 
28,534,866.16 
28,962,176.20 
32,086,709.90 
35,191,081.40 
33,025,606.45 
35,496,683.15 
39,202,908.20 
27,518,856.60 
12,641,078.00 
8,802,797.30 
9,200,350.85 
5,698,010.25 



Minor. 



$165,003.00 
391,395.95 

. 428,151.75 
960,400.00 

1,604,770.41 
796,483.78 
191,622.04 
343,186.10 

1,215,686.26 
912,200.78 

1,283,408.49 

1,384,792.14 

1,312,441.00 
961,480.42 

1,134,931.70 
438,177.92 
882,430.56 



Total. 



$66,814,859.00 
90,111.368.70 

125,219,205.50 
94,821,217.00 
^0,093,728.86 
53,323,106.43 
56,926,810.74 
61,375,438.00 
60,379,150.66 
65,318,615.23 
58,194,022.64 
61,054,882.84 
58,053,302.60 
48,389,780.92 
66,934,749.00 
89,184,688.77 
66,196,798.31 



Gold and silver , TJnited States notes, etc., in United States Treasury and in circu- 
lation, from 1872 to 1895, inclusive. 



July 
1— . 



1872. 

1873. 

1874. 

1875. 

1876. 

1877. 

1878. 

1879. 

1880. 

1881. 

1882 

1883. 

1884. 

1885. 

1886 

1887. 

1888. 

1889 

1890. 

1891. 

1892. 

1893. 

1894. 

1895. 



In Treasury. 



ivT Certifi- 

^I«^^y- cates. 



$24,412,016 

64,078,801 

87,941,750 

102,141,562 

95,638,896 

94,563,964 

106,910,422 

260,058,398 

240,156,568 

291,874,503 

307,887,580 

387,676,705 

423,087,520 

502,710,611 

491,117,849 

57,987,016 

655,789,464 

669,551,558 

696,649,256 

679,755,789 

750,211,165 

720,478,491 

749,120,255 

786,928,734 



$215,000 

755,000 

445,000 

275,000 

1,135,000 

2,025,520 

3,636,350 

6,985,401 

12,354,201 

11,673,720 

38,883,415 

50,825,700 

52,164,110 

83,241,320 

33,996,513 

49,910,615 

42,632,504 

31,215,6.33 

41.807,579 

21,041,149 

6,222,656 

10,505,818 

9,710,213 



Circulation. 



Money. 



$738,309,549 

720,366,809 

718,083,031 

696,131,947 

695,044,388 

668,489.883 

682,880,554 

773,582,493 

945,393,769 

1,057,717,870 

1,101,510,309 

1,084,817,640 

1,064,162,318 

1,034,722,939 

1,070,289,925 

1,075,425,689 

1,035,601,563 

989,120,855 

988,974,173 

1,048,266,672 

1,103,720,103 

1,165,520,208 

1,208,543,123 

1.178,519,223 



Certificates. 



31,515,000 

58,000,000 

57,970,000 

32,565,000 

53,825,000 

46,252,080 

45,049,300 

27,988,469 

56,520,249 

72,780,110 

145,488,056 

179,763,651 

257,845,676 

182,410,600 

242,113,454 

336,519,307 

391,240,794 

440,277,097 

449,174,035 

497,627,084 

431,181,037 

452,265,585 



Total. 



$738,309,549 

751,881,809 

776,083,031 

754,101,947 

727,609,388 

722,314,883 

729,132,634 

818,631,793 

973,382,228 

1,114,238,119 

1,174,290,419 

1,230,305,696 

1,243,925,969 

1,292,568,615 

1,252,700,526 

1,317,639,143 

1,372,170,870 

1,380,361,649 

1,429,251,270 

1,497,440,707 

1,601,347,187 

1,596,701,245 

1,660,808,708 

1,601,968,473 



Per 
capita, 



$18.19 
18.04 
18.13 
17.16 
16.12 
15.58 
15.32 
16.75 
19.41 
21.71 
22.37 
22.91 
22.65 
23.02 
21.82 
22.45 
22.88 
22.52 
22.82 
23.41 
24.44 
23.87 
24.33 
22.97 



Population 
June 1. 



40,596,000 
41,677,000 
42,796,000 
43,951,000 
45,137,000 
46,353,000 
47,598,000 
48,866,000 
50,165,783 
51,316,000 
52,495,000 
53,693,000 
54,911,000 
56,148,000 
57,404,000 
58,680,000 
59,974,000 
61,289,000 
62,622,250 
64,002.000 
65,403,000 
66,826,000 
68,275,000 
69,753,000 



eULLOM ON SOUND MONEY. 9 

It may be claimed that there is apparently no immediate prospect of an 
international agreement. That may be true, but it is likewise true that the 
tremendous increase in silver production everywhere has only recently begun 
to be noticed and its new relation to be understood. Who would have sup- 
posed in 1865-66, when the world was moving along quietly and with apparent 
regularity, and had been for many years producing perhaps forty millions 
of silver per year, that the world should to-day be piling up five times that 
amount? 

D£CI.IXC IN VAI.IIE BECAUSE OF IJVCREASED SUPPL.Y. 

Who could have supposed that in six years, from 1888 to 1894, the world 
should have increased its already enormous production of one hundred and 
eighteen millions to two hundred and sixteen millions of silver in a single 
year? No economist ever imagined such a condition. It was wholly unpre- 
cedented; yet judging by the more recent yield, it is possibly only the stepping- 
stone to the yield of coming years. When the fact is understood that we are 
possibly to have a constant and increasing addition to the world's silver, 
without any similarly increasing demand for it, either as money or as a 
commodity, it is apparent that its value has become and must continue 
subject to the inflexible laws of trade, like any other commodity. It must 
decline in market value under such increased supply. Its quotations must 
fluctuate with the fluctuations of supply and demand like coal, like iron, and 
other products. Upon no consistent basis can any fixed ratio be established 
by the United States alone between silver and gold under such circumstances. 

WORIiD'S RATIOS AND VALIJES. 

The ratio in 1873 was 16 to 1; in 1893 it was 32 to 1. In 1873 it required 
16 ounces of silver to purchase 1 of gold. In 1893 it required 32 ounces of 
silver to buy the same ounce of gold. These are not merely the prices and 
ratios of the United States, but they are the world's ratios and the world's 
values. The United States did not establish them, and who will contend that 
the United States can change them, except in a slight degree? Suppose for 
a moment that free and unlimited coinage of silver in the United States had 
continued from 1873 down to the present. What now would be the situation? 
The United States have coined in the twenty-one years following 1873, and 
including that year, approximately, five hundred and twenty millions of 
silver. According to the contention of the silver producers, if the coinage had 
been free during this period we ought to have coined more than double this 
sum, or perhaps one thousand to twelve hundred millions of dollars. But 
with only the five hundred millions coined we find the value has declined so 
that a dollar is intrinsically worth about 50 cents. What would have been 
the depreciation if the coinage had been so doubled? No man can tell; but 
would it be unreasonable to suppose that the silver dollar would have bees 
worth no more than 35 to 40 cents? Probably not. But, say our friends, the 
coinage of it into standard dollars would have fixed its value. The coinage 
of silver or gold or the stamping of paper may declare its nominal value, 
but that does not establish its intrinsic value if the world does not recognize 
it or if commerce will not have it so. Mexican dollars and the coins of many 
other countries have time out of mind been used in the traffic and trans- 



16 CULLOM ON SOUND MONEY. 

actions of other nations, but they have almost always been treated as a mere 
commodity, worth just so much as commerce had determined, and were 
shoveled or weighed or counted out at their commercial worth only. 

liAWS CONCERJVIXG MONEY VAI.IIES. 

The great and omnipotent commercial public of the world makes its own 
laws concerning money values and determines for itself whaf is a just 
standard or measure of value, regardless of the dictum of any political con- 
gress or parliament. In view of the immense addition to the silver output 
to which I have called attention, and of the disturbing influence which such 
addition necessarily causes, I feel sure that the great commercial nations will 
be compelled to devise means to adjust our monetary relations so as to be 
just alike to the producers of silver and to determine a proper ratio by 
which all shall abide. 

But let no man flatter himself that a determination of the great economic 
problem will ever be arrived at under the teachings of the empirics who vie 
with each other in the effort by legislation to put the dollar stamp on a half- 
dollar's worth of silver in any single country. 

CAN DO BETTER THAN EXPI.OIT INTANGIBI.E 
THEORIES. 

In our local and municipal conventions, in the political caucuses, and on the 
partisan platform we see men settling this great question by insisting that 
the United States shall adopt free coinage regardless of the course of other 
nations. 

The supply of silver in the world and the commercial demand for silver 
being what determines its value practically, it is only just that all commercial 
nations shall participate in establishing an international ratio, giving silver 
an international value equivalent to and interchangeable for a certain amount 
of gold between all concurring nations. If we shall devote our surplus elo- 
quence and overflowing- patriotism to securing that result we shall do far 
better than in exploiting intangible theories. 

HISTORY OF INTERNATIONAL CONFERENCES. 

Let us look a little into the history of the several international monetary 
conferences. The first one met at Paris, June 17, 1867. It was called by 
the invitation of the French Government. The United States of America and 
18 of the European countries participated. They were unanimous in expres- 
sion against a single silver standard, and with the exception of the Nether- 
lands, were unanimous in favor of a single gold standard. I may say, in 
passing, that very many of the countries engaged in the conference have 
had the silver standard. None of the countries participating took action to- 
ward establishing the suggestions of the commission, and although the French 
Government was given the power to reassemble the conference, it never 
exercised that power. 

The second international monetary conference was called by the President 
of the United States in accordance with an act of Congress of February 28, 
1878, and met at Paris, August 17, 1878. Twelve countries were represented, 



OULLOM ON SOUND MONEY. 11 

the United States representatives being Reuben E. Fenton, of New York; 
W. S. Groesbeck, of Ohio; Francis A. Walker, of Connecticut, and S. Dana 
Hortou. Tlie substance of the opinions of the members was: First, that the 
monetary function of silver as well as of gold should be preserved in the 
world, but that the choice of one or both should be governed by the special 
situation of each group of states; second, that the restriction of silver coinage 
should be discretionary with each state or group; third, that existing ditfer- 
euces of opinion prevented the adoption of a common ratio between the two 
metals. The x?onference adjourned August 29. 

The third international monetary conference was called in 1881 by the 
joint action of France and the United States to establish a system for the 
use of silver and gold as bimetallic money, with a relative settled value be- 
tween the two metals. Thirteen countries were represented. The United 
States representatives were William M. Evarts, of New York; Allen G. Thur- 
man, of Ohio, and Timothy O. Howe, of Wisconsin. This conference closed 
by adjourning to April 12, 1882, but it was never reconvened. 

CONCISE A]^I> COMPREnEl^SIVE E^STRUCTIOXS. 

The fourth international monetary conference was called by the United 
States, and met at Brussels, November 22, 1892. The delegates from this 
country were William B. Allison, John P. Jones, James B. McCreary, Henry 
W. Cannon, E. Benjamin Andrews, and Edwin H. Terrell. The instruc- 
tions which were given by President Harrison, through Secretary of State 
John W. Foster, were so concise and comprehensive that I deem them worthy 
of introduction here, as representing in apt language the true theory to be 
adopted by the United States upon the coinage question. 

" Department of State, Washington, November 10, 1892. 

* * * rpj^g main purpose which this Government seeks to accomplish by 
this conference is to bring about a stable relation between gold and silver. 

" It is the opinion of the President, and, as he believes, of the people of the 
United States, with singular unanimity, that a full use of silver as a coined 
metal at a ratio to gold to be fixed by an agreement between the great com- 
mercial nations of the world would very highly promote the prosperity of 
all the people of all the countries of the world. For this reason your first 
and most important duty—" 

This is addressed to the delegates— 

" will be to secure, if possible, an agreement between the chief commercial 
countries of the world looking to international bimetallism— that is, the un- 
limited coinage of gold and silver into money of full debt-paying power at a 
fixed ratio in coinage common to all the agreeing powers, 

" You should not lose sight of the fact that no arrangement will be accept- 
able to the people or satisfactory to the Government of the United States 
which would by any possibility place this country on a silver basis while 
European countries maintain the gold standard. 

" Failing to secure international bimetallism, the next important duty will 
be to secure, if possible, some action upon the part of European countries 
looking to a larger use of silver as currency, in order to put an end to the 
further depreciation of that metal. * * * 

JOHN W. FOSTER." 



12 GULLOM ON SOUND MONEY. 

It seems to me that that letter, signed by the Secretary of State, at that 
time John W. Foster, but written, I imagine, by the President of the United 
States, states the truth as near as it can be stated by anybody; and it states 
what in my judgment is the only safe position which our country can occupy 
upon this question. 

THE IVATIOWS WII.I. SETTEE IT. 

I desire to say here that I should hail and will hail any settlement of this 
question that will not take our Government out of the position it has occu- 
pied and malie it purely a monometallic silver country, driving out the gold. 
And in my opinion the time is near at hand when this Government and other 
commercial nations with which we are dealing will be able to settle this 
question so that the silver interests of this country and silver as a money 
metal will be cared for and will be placed, probably, as I hope, on a par 
with gold. But I insist that by any other course than an international agree- 
ment between ourselves and other great commercial nations it would be a 
dangerous experiment for this Government to undertake the free coinage of 
silver. 

TRUE BASIS OF BI1IIETAI.I.IS1I. 

The instructions which I have read present, as I have said, the true basis 
of bimetallism, and in my judgment indicate the only solution which can 
ever be reached satisfactory to most of the great nations of the world and 
in the interest of the people of the United States. For the United States 
alone to declare for free coinage would be ineffective, except to the great 
injury of our own people. This country, great and powerful as it is, popu- 
lated by an intelligent and enterprising people, is not the controller nor the 
autocrat of the monetary world. Our wishes and desires may all be right 
and proper, but our present power does not justify us in establishing an 
exclusive monetary system which shall invite the antagonism of twenty or 
thirty other nations, nearly all of which are greater or lesser contributors 
to the trade we now enjoy. 

Mr. President, what the nations need is an international conference and 
agreement as to the use of silver, fixing the ratio, and then opening the 
mints for free coinage upon the ratio to be agreed upon. Every year and 
month and day makes it clearer to me that such a conference is sure to come, 
and I believe very soon. What a relief to the situation in this and other 
nations if this vexed, troublesome, and vastly important question could be 
settled— settled in harmony with the interest of silver as a money and in har- 
mony with the best interests of the people of this and all the nations. 

IlVTEBlVATIOlVAIi COXCLRBEIVCE WIM. SETTI.E 
THE ISSUE. 

I may say here that in talking with a certain silver Senator, if I may so 
designate him, he intimated to me that he would be willing to fix the ratio 
at 32 to 1. I do not know whether the silver men generally would agree to 
such a ratio. But whatever ratio the principal nations will agree to, whether 
it is 1514 to 1 or 16 to 1, or 20 to 1, will be entirely satisfactory to me> because 



eULLOM ON SOUND MONEY. 13 

if those nations make such an agreement, in my judgment it will probably 
bring the commercial value of silver up to par with gold. But without such 
an agreement it would be utterly futile, in my judgment, for us to undertake 
it with any expectation that it would increase the price of silver very materi- 
ally for one single nation to do so. 

WHAT THE GREAT PARTIES HAVE SAIH. 

The great political parties in their national conventions have expressed 
themselves strongly in favor of the determination of the relative values of 
gold and silver by international action. 

The Republican party said at Minneapolis in 1892: 

" We commend the wise and patriotic steps already taken by our Govern- 
ment to secure an international conference to adopt such measures as will 
insure a parity of. value between gold and silver for use as money throughout 
the world." 

That resolution is sound. We .there took the position four years ago in 
favor of an international conference for the purpose of fixing a ratio which 
would insure a parity of value between gold and silver. 

The Democratic party said at Chicago in 1892: 

" We hold to the use of both gold and silver as the standard money of the 
country and to the coinage of both gold and silver without discrimination 
against either metal, or charge for mintage, but the dollar unit of coinage of 
both metals must be of equal intrinsic and exchangeable value or be adjusted 
through international agreement, or by such safeguards of legislation as shall 
insure the parity of the two metals." 

I am not sure but that the Democratic platform on that question four years 
ago was a little better than the Republican platform, because in addition to 
their favoring an international agreement for the adjustment of the ex- 
changeable values of these two metals, they used the words " but the dollar 
unit of coinage of both metals must be of equal intrinsic and exchangeable 
value," The word " intrinsic " is not a part of the Republican platform. 

WHAT THE POPUIilSTS SAII> IM 1898. 

The Populist party, calling itself " the People's Party," said at Omaha in 

1892: 

" We demand the free and unlimited coinage of silver and gold at the pres- 
ent ratio of 16 to 1." 

The Populist party also said: 

" We demand that the amount of circulating medium be speadily increased 
to not less than $50 per capita." 

This latter enunciation of the principles of the party, which has been sonie- 
what in evidence for a few years, would seem to be its own most certain 
antidote. 

%VHAT "SOUXD MONEY" MEANS. 

I hear a good many men say that " sound money " is a mere phrase; that 
it does not mean anything; that anybody can use the expression and still be 



14 CULLOM ON SOUND MONEY. 

entirely in order. But there is a definition of it which it seems to me means 
something. The best and most appropriate definition of the term " sound 
money " as applied to metallic coinage is to be found in the words of one of 
the most distinguished international bimetallists of the world, Henry Cer- 
nuschi, as follows: 

" It is by the ordeal of fire that money can be tried. The coins which, being 
melted down, retain their entire value for which they were legal tender be- 
fore they were melted down are good money. Those which do not retain it 
are not good money." 

Expressing it in other words, he says: 

" Good money consists of coin which is worth as much after it is melted as 
it purports to be worth in coin." 

Edward Atkinson says: 

" Bad money can only be circulated by force. Good money requires no force. 
Everybody is glad to get it. Money made of gold, or its representative, con- 
vertible or redeemable in gold, is the world's standard or unit of value. 

" There must be a final ultimate standard or unit or coin by which all other 
forms or types of money— silver, nickel, copper, or paper— must be rated. 
All such subsidiary typ s of what is sometimes called money, sometimes 
called currency, sometimes instruments of exchange, can only be kept in 
circulation at a parity with the unit or standard by positive, absolute redemp- 
tion or payment therein. If the law gives an employer the power to force 
bad money upon workmen and does not give the workman an easy and ready 
means of converting that bad money instantly into good money, that work- 
man will be cheated. 

" The pretext is that the coinage of silver dollars at 16 to 1 should be as free 
as the coinage of gold dollars, and that, by itself, can be agreed to. Coinage 
is nothing but the manufacture of round disks of metal stamped and certi- 
fied. There is no danger in free coinage. The danger lies in the efforts of 
these supporters of free coinage at 16 to 1 to force cheap 50-cent dollars upon 
the community by an act of legal tender. The moment anyone offers to any 
of these people to agree to free coinage without an act of force or legal ten- 
der by which thej'' may compel uninformed people to accept these dollars, 
they immediately give up their case; they will not accept free-silver-dollar 
coinage without the power to force them upon the people. 

SII.VER I.EGISI.ATION HAS BEEX DISAPPOINTING. 

Mr. President, both the act of 1878 and the act of 1890— the one called the 
Bland-Allison Act, the other the Sherman Act— were passed by Congress in 
response to a dem,and for free and unlimited coinage of silver by a portion 
of the people and as a compromise between the friends of free coinage and 
those opposed to such action. When the Sherman Act of 1890 was passed 
it was alleged and believed by the friends of free coinage that the effect of 
the act would be to send the price of silver up to about par with gold. The 
price of silver did increase for a time, but soon began to decline again, and 
for some time the commercial value of a dollar of 412^2 grains of silver has 
been only about 50 cents in gold. The effect upon silver by the passage of 
the acts of 1878 and 1890, especially the latter act, has been very disappoint- 
ing to the so-called silver men and somewhat to all who supported it. I my- 
self supported it. It did not have the effect upon the price of silver that 
was expected, and instead of satisfying the special champions and friends 



«ULLOM ON SOUND MONET. 18 

of silver it has only made them more aggressive in favor of the free and 
unlimited coinage of silver at the ratio of 16 to 1, and at the same time 
embarrassed still more the financial situation. 

The solution of the difficulties so apparent can only be reached by con- 
certed international action— by the establishment of international bimetallism. 

GEKUIIVE BIMETAEIilSM IS WOT FREE COINAGE. 

It is claimed by a recent writer that none of the recognized defenders of 
international bimetallism have ever declared in favor of free coina^ce by the 
United States alone. Gen. P. A. Wallier, a most eminent exponent, has de- 
clared distinctly his opinion that free coinage by this country alone. would 
delay, if it did not prevent, adoption of an international agreement establish- 
ing a par of exchange between the gold an silver using countries. 

As to our former legislation he says: 

" Our coinage of two millions a month under the Bland-Allison Act of 1878 
was directly ag-ainst the interests of bimetallism, while our purchase of four 
millions five hundred thousand ounces of silver bullion a month under the 
Sherman Act of 1890 was an even worse strategic blunder." 

Balfour says: - 

" If it be possible by international arrangement to establish a joint standard 
throughout the world, it would not be open to the objection which a single 
standard is open to." 

Barbour says: 

" No final or satisfactory settlement of the currency question is possible ex- 
cept by an international agreement." 

Houldsworth says: 

" It is an international question. It is the duty of Her Majesty's Govern- 
ment to negotiate without delay with other nations." 

Professor Fox well says: 

" Bimetallism is new and involves international agreement, the question of 
valuation as well as the question of ratio. These matters cannot be settled 
by isolated action. We shall never settle the monetary difficulty without 
international action." 

The Bimetallic League: 

" The aim of the Bimetallic League is to secure by international agreement 
the opening of the mints of the leading commercial nations to the unrestricted 
coinage of gold and silver at such a fixed ratio as may be mutually agreed 
upon amongst those nations. ♦ 

" No settlement is, however, in our opinion, possible without international 
action. The remedy we suggest is essentially international in its character, 
and its details must be settled in concert with the other powers." 

THE DISPARITY TOO GREAT. 

Mr. President, it seems to be apparent that after the failure of tlio effort 
on the part of the Government to hold silver at a parity with gold by the 
two acts referred to (under which 456.000,000 ounces of silver were purchased 
between the years 1877 and September 30, 1893) everybody should be con- 
vinced that it would be futile to venture upon free coinage on the basis of 



16 CULLOM ON SOUND MONEY. 

16 to 1, and place it by the side of the gold dollar. The disparity between the 
two metals is too great. The consequences of such action by the Govern- 
ment would inevitably result in the disappearance of gold. The Unitea States 
would at once approach . silver basis, uncertain and changing from day to 
day, with the fluctuations of silver. 

The total estimated metallic stock in the .United States on July 1, 1895, 
according to the last report of the Secretary of the Treasury, was gold 
$636,000,000, and silver $624,000,000, in round numbers. By this state- 
ment it will be seen that there is no great difference between the amount of 
gold anr silver in use in the country. The United States, consideiing the 
great depression in silver, has dealt fairly with the white metal, showing 
great reluctance to give up either. 

I am in favor of using all the silver as coin we can, and we may be able 
to use even more than we are now using, but the question of the standard 
should be settled. We should not depart from the gold standard until we can 
have the co-operation of other great commercial nations and an agreement as 
to the ratio for the free and unlimited coinage of silver for all the nations. 

The Treasury Department shows that on April 1, 1896, there was in the 
Treasury of the United States six hundred and ninety-five millions of all 
kinds of money— gold, silver, paper, and minor coins. On same day there 
was in circulation $1,528,000,000. Assuming that at that time the population 
of the United States numbered 71,909,000, we had in circulation $21.53 per 
capita. The statistics also show that in 1872 our per capita money circulation 
averaged $18.19; in 1873, $18.04; in 1874, .13; in 1878, $15.32; in 1890, $22.. >2, 
and in 1892, $24.44. So that the per capita circulation i.as not Taried to any 
great extent for many years. The variation in the amount of our circulation 
has been largely produced by the fluctuation in the amount in the Treasury 
vaults. 

WAS AI.WAYS MOIVEY TO SPARE. 

Mr. President, since 1872 we have had good times and we have had hard 
times. Neither the one nor the other, it is plain to me, has been produced 
by the changes in our per capita circulation. This leads me to the real cause 
which brought about, first, good times, and next, hard times. Under Republican 
rule we had a protective tariff, and not so much disturbance in the financial 
system as of late. There was always money to spare in the Treasury; we had 
a revenue system that yielded it, and there was no fear ever manifested of 
a bankrupt Treasury. Under the change of Administration and policy there 
has been a continual state of anxiety in the minds of the people engaged in 
any kind of business. With a well-adjusted protective tariff system the de- 
pressed and embarrassed condition of the people of the Gc ernment would 
very soon be greatly relieved, but even with a proper tariff law the situation 
demands that our monetary system must be settled, so that the world may 
know that we mean to be honest with ourselves and with the rest of man- 
kind. But, Mr. President, I do not intend to discuss the tariff question to-day, 
further than to say that without a wise protective tariff in this country 
we will have hard times whatever we may do in relation to our monetary 
system. 

The creditors of the people of the counti'y and of the Government itself 
have perhaps justly questioned even the good faith of the nation in meeting 
its obligations. 



eULLOM ON SOUND MONEY. 17 

" THE CRIME OF 1873." 

A recent editorial article in the Chicago Tribune describes the situation 
thus: 

" Those who " demand " the free coinage of silver at the ratio of 16 to 1, or 
50 cents to the 100-cent dollar, assert that the fall in the commercial value of 
silver was due to " the crime of 1873," which forbade the coinage of silver dol- 
lars when none was being coined, nor had been for many years. They have 
nothing to say about the action taken by Germany prior to 1873, when that 
nation stopped silver coinage and adopted the gold standard. And they never 
mention the fact of France and the Latin Union following Germany's exam- 
ple two or three years later. 

" They are silent about these limitations in countries numbering 130,000,000 
enterprising people, or more than twice the population of this country at the 
last census. They have not reviled Holland, Scandinavia, and Austria-Hun- 
gary for adopting the gold standard — enterprising countries containing nearly 
60,000,000 people. They are not abusing Russia, with her 120,000,000 people, 
for putting her currency on a gold-standard basis. They seem to think that 
what 300,000,000 Europeans have done cuts no figure in the case of silver, and 
that the " future of silver " depends solely on the fiat of the American Con- 
gress for the 16 to 1 ratio or 50-cent dollar. 

" The chief cause of the immense cheapening of silver since 1875-76 is not 
legislation, either that of Europe or of America or both taken together. The 
principal effective cause is overproduction of silver in proportion to the 
demand for it. The mines have turned out more of that metal than the 
world needed or was able to use for coinage and other purposes, and as an 
inevitable consequence the price went down. 

" The commercial world has always determined the relative value of the 
precious metals to suit itself. It has never paid any attention to statutory 
ratios of any nation, but has exercised its own judgment as to values, just 
the same as it does about copper, iron, wheat, corn, and cotton. If the pro- 
duction of silver were to stop that metal would gradually become scarcer. 
The old stock would be consumed, so to speak, and the commercial world, 
without waiting for a law, would rate it at a higher value every year after a 
cessation of its extraction from the mines." 

WOUJLD BAIVKRUPT THE COFWTRY. 

In an address delivered before the Trans-Mississippi Commercial Congress 
at St. Louis, Mo., November 27, 1894, by the Hon. George E. Leighton, the 
following statement is made, showing by contrast the results which would 
follow the establishment, respectively, of the legal-tender free coinage of 
gold and the legal-tender free coinage of silver. Mr. Leighton says: 

" An act of Congress to make legal tender the gold coin of any country, or 
every country on the face of the earth, at rates established according to 
their actual weight and fineness as compared with the 25/^ grain standard 
dollar of the United States would not produce a ripple of disturbance in the 
commercial world. Not a sovereign, or franc, or mark, or florin, or peso, 
would come or go, except in the normal flow created in the settlement of in- 
ternational balances. There would be no movement, simply because the coin 
would have no more value in one place than another. 

" To pass an act to receive the silver coin of the world as legal tender at the 
rates established according to weight and fineness, according to our false 
412y2-grain dollar, would bankrupt the country, as it would mean taking the 
world's silver at double its present value. Does this not prove that the posi- 
tion is inconsistent and untenable?" 



18 CULLOM ON SOUND MONEY. 

In my opinion the substantial correctness of this position cannot be con- 
troverted. One of these naetals is the nearly universal standard, with a 
determinate intrinsic value, by which is measured the value of the produc- 
tions of the world, while the other has but a transitory and uncertain value, 
dependent upon demand and supply, and contingent upon prosperity or ad- 
versity among the people. It matters not what silver was twenty years ago. 
It does not in any way bear upon the issue to say that before 1873 silver 
possessed certain attributes as a measure of values. It does not possess them 
now. A great change occurred. The fact exists, and governments deal only 
with existing facts. It cannot take cognizance of obsolete and abandoned 
conditions. Lamentations over a change which occurred nearly a generation 
ago, resulting in which to-day is part of the settled coinage policy of nine- 
tenths of the civilized world, are wholly fruitless and unavailing. 

RETHftEMENT OF SII.TER BY GREAT NATIOJTS. 

Silver as a standard currency was retired in Germany in 1871, suspended 
in Belgium, France, Holland, Denmark, Sweden. Norway, and the United 
States in 1873, and in Italy and the Dutch Colonies in 187.5, and in many 
other countries before and since 1873. With silver possessing the value it 
now bears the return of any single country to a legal-tender silver standard 
would imperil not only its commercial interests, but its very position among 
nations. 



NOT A SECRET CRIME. 

I desire to notice a few of the unfounded assertions which constantly pass 
current as part of the literature of the free-coinage, legal-tender advocates. 
It has been widely asserted that by the act of 1873 silver was secretly de- 
monetized. An examination of the Congressional Globe of that session dis- 
closes the fact that the discussion upon the bill covers 140 columns of the 
Globe, and that the bill was printed more than a dozen times during its 
progress through Congress. In addition to the discussion of its general pro^ 
visions, the matter of the omission of the silver dollar from the authorized 
coinage of the country was freely discussed in the House of Representatives 
by such members as the distinguished Republican, William D. Keiley, the 
distinguished Democrat, Clarkson N. Potter, with W. L. Stoughton and 
Samuel Hooper. Mr. Keiley said: 

" It is Impossible to retain the double standard. * * * All experience has 
shown that you must have one standard coin." 

Mr. Potter said: 

*' This bill provides for substituting as legal tender coin of only one metal 
instead, as heretofore, of two. I think myself that this would be a wise pro- 
vision, and that legal-tender coins, except subsidiary coins, should be gold 
alone." 

Mr. Stoughton said: 

" Gold is practically the standard of value among all civihzed nations, and 
the time has come in this country when the gold dollar should be distinctly 
declared to be the coin representative of the money unit." 



CULLOM ON SOUND MONEY. 19 



Mr.' Hooper said: 



" The committee, after careful consideration, concluded that 25^*^ grains of 
standard gold, constituting- the gold dollar, should be declared the money 
unit or metallic representative of the dollar of account." 

It was also discussed and amended in the Senate. This law of 1873 was 
not rushed secretly through without consideration. It was enacted in the 
same manner in which all laws are enacted, and yet, although it is claimed 
to have injured silver, it is a fact that the average annual coinage of silver 
for twenty years following " the crime of 1873 " was more than ten times 
the annual average for the forty years prior to that year. The Government 
has gone out of its way to favor silver and has as a special favor stored away 
in its vaults some $350,000,000, for which it gives circulation to a representa- 
tive paper certificate which passes for money. 



DEPRECIATION^ DDE TO INCREASE IN PRODUCTION. 

Mr. President, the argument, or rather the assertion, that the act of 1873 
has brought about the reduction in the price of silver is gratuitous. The 
depreciation in silver is due largely to the increase in production, not only 
in the United States, but over the whole world. I do not believe that by 
any logical argument or true statement of conditions can it be shown that the 
law of 1873 reduced the commercial value of silver materially. On the con- 
trary, if free and unlimited coinage had been given its full effect the amount 
rushed through the mints would probably have brought down the price of 
silver much sooner, and to a lower point than it has yet reached, because 
those nations at that time had nearly all demonetized silver, to use the ordi- 
nary expression, so that if we had continued the free and unlimited coinage 
of silver, without regulation as to the admission of foreign bullion, we would 
have been overwhelmed with silver. 



NATURAI. AND COMMERCIAI. CAUSES. 

Why not give to well-known natural and commercial causes the credit or 
the blame for the fluctuation in silver value instead of charging it to legisla- 
tion of 1873? Why, at the time that law was enacted one would hardly see 
a silver dollar in circulation in a month's travel. Silver, except m the smaller 
coins, was practically out of use. In the next four years, 1874 to 1877, in- 
clusive, there were no silver dollars coined. But what was coined? Did 
silver lose anything? Not a farthing. On the contrary, in those four years 
there was coined $21,500,000 in half-dollars and $15,300,000 in quarter-dollars, 
or a total of over $36,800,000 in silver. This was an average of over $9,200,000 
a year in silver half and quarter-dollars, being a greater quantity of silver 
than had ever been coined into similait silver pieces in any four years either 
before or since 1873. 

And so, Mr. Pr«sident, on applying the touchstone of simple fact to the 
wholesale creations of the imagination which have been woven about this 
subject they vanish like a bieath. 



20 CULLOM ON SOUND MONEY. 

ASSERTIOIV CAl^XOT BE SUBSTAIVTIATEB. 

Let us look at another claim. It is constantly asserted that our trade 
demands an increase of circulating medium. The political scientists who 
met in Omaha in 1892 and nominated Mr. Weaver for President, seriously 
demanded that the circulating medium should be rapidly increased " to not 
less than $50 per capita." 

In point of fact the amount of money in actual circulation in the United 
States has never been less than $22 per capita since 1881. It has fluctuated 
between $22 and $25 during that time. And at this present time, counting 
the money in the Treasury in the computation, we have per capita of money 
in the country about $34. No other country in the world exceeds this, or 
anywhere nearly equals it, except France, which has about $36 per capita. 
It is not necessary here to discuss the reason why France should slightly 
exceed the United States in amount of money per capita. It is sufficient to 
answer the insistence that we have too little money in circulation by saying 
that it is a mere assertion, incapable of substantiation. The average circulat- 
ing medium in thirty countries of the world is less than $13 per capita. 
France excepted, the United States stands at the head and has more than 
twice as much money per capita as the average nation of the world. 

This fact ought to settle the contention without further argument, as the 
figures are taken from the statistical reports of the officials of the United 
States. 

MEET MONETARY QUESTION WITH COURAGE. 

Mr. President, in the remarks I have made I have sought to give my views 
dispassionately on the subject in the hope that we may, guided by history, 
observation, and reason, arrive at a proper final decision in the interest of the 
general welfare of the people of this country. The monetary question presses 
itself upon the attention of the country. Let us meet it with courage and 
do right. We cannot permit the free and unlimited coinage of silver at 
16 to 1 if we look to the interest of the people of the United States, except 
as the result of an international agreement for such coinage by the leading 
commercial nations. With such agreement we can. We cannot depart from 
the gold standard with safety until such international agreement is made. 
I believe the time will soon come when a conference of the nations will be 
held and by which the silver question will be settled by fixing a ratio for 
its use as a money metal and for opening the mints for its free coinage. I 
hope for it, and look for it. 



Blaine Against Free Coinage at 16-1, 



SPEECH 



OP 



Hon. James Q. Blalne 

OF MAINE. 

In the Senate of the United States, 
February 7th, 1878. 



•♦At current rates of silver, the free co!na$:e of a dollar 
contalninig 41^^ 1-2 grains, worth in gold about 92 cents, gives 
an illegitimate profit to the owner of the bullion, enabling him 
to take 92 cents worth of It to the mint and get it stamped as 
coin and force his neighbor to take it for a full dollar. This is 
an undue, an unfair advantage which the Ooybrnment has no 
right to give the owners of silver bullion, ^nd which defrauds 
the man who Is forced to take the dollar." 



WASHINGTON. 
1896. 



Blaine Against Free Coinage at 16-L 



SPEECH 

OF 



Hon. JAMES G. BLAINE, 

OF MAINE, 
ja the Senate o£ the United Sutes, Febfuafy 7th, J 878. 



Mr. President : The- discussion of the question of remone- 
tizing silver has been prolonged and exhaustive. I may not expect 
to add mu^ tQ^its valae, but I promise not to add much to 
its length, rj&il endeavor to consider facts rather than theories, 
to state conclusrons rathep than arguments. 

I believe gold arid silver coin to be the money of the Cpjistitu- 
tion*, — indeed 'tiie' money >of the American people anterior to the 
Constitution, v/,)iich that great organic law recognizeti as independ- 
ent of its own 'existence. No p^^wer was conferred on Congress to 
declare that either metal should not be money. Congress has, 
tfeerefgre, in my judgment, ncf power to demonetize silver anymore 
thaii to demonetize gold ; no more power to demonetize either than 
to demonetize both. In this statement I am but repeating the 
weighty dictum of the first of constitutional lawyers? " I am cer- 
tainly of the opinion," said Mr. Webster, *'that gold and silver, at 
rates fixed.^ by Congress, constitute the legal standard of value in 
this country, and that neither Congress nor the State has authority 
to establish or to displace this standard.'* Few .persons can be 
found, 1 ^ppr^end, who will maintain that Congress possesses 
the power ta demonetise both g'old and silver, or that Congress 
would be justified in prohibiting the cdinage of both, and yet in 
\cfgh and legal construction it would be difficult, to sht>vy where 
and why the power o,f Congress over silver is gr'd^ter than over 
gold,— greater over either -than over both. If, therefore, silver has 
be^n demonetized^ I am in favor of remonetizing it. If its coinage 
has beeii^prohibited, II am in favor of ordering it to be resumed. 
If it has been restricted, I am in favor of ordering it to be enlarged. 



ITiITERNATIONAI. DEIWLONBTI^ATION, 

THE LEADING CAUSE FOR DE- 

CI.INE IN PRICE OF SII.TER. 

What power, then, has Congress over gold and silver? It has 
the exclusive power to coin them ; the exclusive power to regulate 
their value — very great, very wise, very necessary powers, for the 
<|uscreet exercise of which a critical occasion h^s now- arisen. 
However men may differ > about causes and processes, all will 
admit that within a few years a great disturbance has taken place 
in the relative values of goldand silver, and that silver is worth less-, 
or gold is worth more; in the money market of the world m 1878 
than in 1873, wHen th'e further coina!jge of silver dollars was pro* 

hibited in this country. To remonetize it noWj as though 
the facts and circumstances of that day were sur- 
rounding us, is to willfully aiid blindly deceive our- 
selves. If our^demonetization were the only cause for 
the decline in the value of silver, then remonetization 
would be its proper and effectual cure. But other 
causes, quite beyond our<Jontrol, have been far more 
potentially operative than the simple fact that Con- 
gress pVohibited its further coinage. As legislators, 
we are bound to take cognizance of these causes. 
The demonetization of sQver in the great German 
Empire and the consequent partial or well-nigh 
complete, suspension of coinage in the governments 
of the Latin Union, have been the leading dominant 
causes for the rapid decline in the value of silver^ 

I do noi think the oyersupply of silver has had, in comparison 
with these other causes, an appreciable influence in the decline of 
its value, because it? oversupply, with respect to gold in these 
latter years, has pot been so great as was the oversupply of gold 
for many years after the mines of California and Australia were 
opened ; and the oversupply of gold from these rich sources did 
not affect the relative positions and u^es of the two metals in any 
European country. 

RESTORATION OF SII.VER IMPOSSIBI.E 

WITHOUT THE CO-OPHRATION 

OF EUROPE* 

I believe, then, if Germany were to remonetize 
silver and the Kingdoms and States of the Latin 
ymon were to reopen thair miiit% silver "would at 



once resume its former relation with gold The 

European countries, when driven to full remonetization, as I beHeve 
they will be, must of necessity adopt their old ratio of fifteen and a 
half of silver to%i of gold, and we shall then be compelled to adopt 
the same instead of our former ratio of i6 to i. If we fail to do this 
we shall, as before, lose our silver, which, like all things else, seeks 
the highest market ; and if fifteen and a half pounds of silver will buy 
as much gold in Europe as sixteen pounds will buy in America, 
the silver, of course, will go to Europe. 

OUR SII.TER OOI.I.AR MUST BE WORTH 
ONB MUNBREO CEIJ^TS IN G01.». 

But our line of policy in a joint movement with 
other nations to remonetise, is simple and direct. 
The diiSeult problem is what we shall do when we 
aim to re-establish silver without the co-operation 
of European peppers and really as an advance 
movement to coerce those powers into the same 
policy. Evidently the S.rst dictate ^f prudence is 
to coin such a dollar ass will nb1> only do justice 
among our citisens at home, but will prove a 
protection— an absolute barricade— against the gold 
monometaliists of Europe, who when the opportu- 
nity o^ers will quickly draw from us the one 
hundred and sixty millions of gold coin which we 
now hold. 

FRKB COINAGE AT i6 TO x WOUI.O 
FORCB US TO A SINGI.B 

SII^VER STANDARD. 

If W6 coin a silver dollar of full legal tender, 
obviously below ttQ current of value of the 
gold dollar, we are opening wide otir doors and 
inviting Europe to take our gold. With our gold 
S.owing out from us, we shall be forced to the 
single silver standard and our relations with the 
leading commercial countries of the world will be 
not only embarrassed but crippled. 



AT CURRBNT RATKS, FREH COINAGB 

WOULrB BENEFIT THE HUI.I<ION 

OWNIER ANO DEFRAUH 

AI.1^ OTKERSu 

The question before Congress, then — s^harply defined in the 

pending House Bill— is, whether jj; is HOW Safe and expedi- 
ent to offer fr§p coinage to the silyer dollar of '412)4 
grains, with the mints of the Latin Union closed and 
Germany not permitting silver to be coined as 
money. At current rates of silver, the free cbinage 
of the dollar containing 4123^ grains, worthy gold 
about ninety-two cents, gives an illegitimate profit 
to the owner ^f the bullion, enabling him to take 
ninety-two cents worth of it to the mint and get it 
Stampedes coin and force his neighbor to take it for 
a^full dollar. This is an undue, an unfair advantage 
which the Government has no right to give to the 
owner of the silvei^ bullion, and which defrauds the 
man who is forced to take the dollar. 



FREE COINAGE WII.1^ CAUSE OUR 

GOI.B TO I.EAYE US. 

It assuredly follows that if we give free coinage 
to this dollar of inferior value, and put it in cir- 
culation, we do so at the expense of our better 
coinage'in goldj and unless, we expect the uniform 
and invariable experienee of other nations to.be in 
some mysterious way suspeijLded for our peculiar 
benefit, we will inevitably lose "our gold coin. It 
will fiow out from us with the certainty and with 

the force of Jhe tides. Gold has indeed Fx^maioed with us in 
considerable amount during the circulation of the^ inferior currency 
of the legaHender,- bujt taat was because there were two great uses 
reserved by law for gold—the collection of customs, and the pay- 
ments of interest on the public del^t. But if the inferior silver coin 
is also to Ue useji for these two reserved purposes, then gold has 
no tie to bind it to us. What gain, therefore, should we 
n^aie, for the circulating medium, if, on opeijing 
th3 gate for silver to fid w in, we op^n a still wider 
gate for ^old to flow out ? If I were tp venture upon 
a dictum upon the silver question, I should declare 
that until iJurope remonetiaos silver w© cannot 



alFord to coin a dollar bm low as 412^^ grains. 

After J^urop® remonetizes on the old standard we cannot afford to 
coin a dollar above four hundred, grains. If W0 eoin tOO lOW 

a dollar before general remonetlsation our gold 
will lea¥e us. If we coin too higli a dollar before 
general remonetization, our silver will leave tis* 
It is only an equated value before and after general 
remonetization that' will preserve botli gold and 
silver to us. 



TUB FURCMASIHQ POWER OF MKBEKM- 

ABI.K PAFBM MOHE^ BIMIHISMEB 

BV FRBK COIHAC^K* 

Consider further what injustice would be done to every holder 
of a legal tender or national bank note. That vast volume of 
paper money— in excess of seven hu^jdred millions of dollars— is 
nqv7 worth between ninety-eight and ninety-nine cents on the 

dollar in gold coin. The holders Of it, wbo are indeed 
our entire population, from tlie poorest to the richest^ 
have been promised from the hour of its issue that 
their paper money will one day be a.s good as gold. 
Tp pay silver for the greenback is a full compliance 
with this promise and this obligatiouj provided 
the silver is made, as it always has been hitherto, 
as good as gold. To mak^ our silver coin even 
three per Qgnt. less valuable than gold inflicts at 
once a loss of more than twenty millions of dollars 
on the holders of our paper money. To make a 
silver dollar worth but ninety-two cents precipi- 
tates, on the same class, a loss of ^nearly sixty 
miiliojis of dollars, ^or whatever tl;e value of the 
silver dollar is, the whole paper issue of the 
country will pink to ita standard when its coinage 
is authorized and its circulation becomes general 

in the channels of trade. Some one m conversation with 
Commodore Vanderbilt, during one of the many freight competi- 
tions between the triink .lines, said, " It cannot be that the Cana- 
dian railroad has sufficient carrying^capacity to' compete with your 
great line?'* **That is true,'* replied the Commodore,* "but they 
can fix a rate and force us down to it." Were Congress to pass a 
law to-day declaring that every legal tender note and every na- 
tional bank note shall hereafter pass for only ninety-six or ninety- 
seven cents on the dollar, there is not a constituency in the^United 



8 

States that would re-elect a man js^ho supported it, and in many 
districts the man would be lucky if he escaped merely with a 
defeat at the polls^ 

OPII?^IOKS OF FIHANCIAI^ SCIKNTIStS 

WORTHLESS IN TKK FACE OF 

CONTROI^LINC^ FACTS* 

Yet it is almost mattieinatically dempnstrable 
that the same enect will follow from the coinage 
of an inferior silver dollar. Assurances from 
empirics and scientists in finance that remonetiza- 
tion of the former dollar will at once and perma- 
nently advance its value to par with gold are worth 
little in the face of opposing and controlling facts. 

The first and instant effect of issuing any silver dollar that will pay 
customs dues and interest on the public debt, will undoubtedly be 
to raise it to a practical equality with gold ; but that condition will 
last only until the amount needful for customs shall fill the chan. 
nels of its use ; and the overflow going into general circulation 
will rapidly settle to its normal and actual value, andjhen the dis- 
count will come on the volume of the paper currency, which will 
sink pari passu v/ith the silver dollar in which it is made redeem- 
able* 

NATIONAI. REMOJ^FTl^ATIOI^ ZNABB. 

QUATE TO RESTORK THE 

VA1.UE OF SII.TER. 

That remondtization will have a considerable 
effect in advancing the value of the sliver dollar is 
very probable, bat not enough to* overcome the 
difference now existing— a difference resulting from, 
causes independent of our control on this contineat 

REMONETI^ATIOK BBI^OW' A FAIR 

STANDARD OF %^I.UB SHOIHUB 
NOT BH ATTBMFTEHo 

The responsibility for re-establishing silver in its ancient and 
honorable place as money in Europe and in America, devolves 
really upon the Congress of the United States. If we act here with 
wisdom and firmness, we shall not only succ^sfully remonetize 
silver and bring it into general use as money In our own country, 
but the influence of our example will be potential among European 
nations, with the possible exception of England * Indeed, our axu 
i^ual ixuiebtment to Europe is so great that, if we have the right to* 



pay in silver, we necessarily coerce those nations by the strongeai 
of all forces, self-interest, to aid us in upholding the value of silver 
as money. 

But if we attempt the remonetization on a basis 
wbich is obviously and notoriously below the fair 
standard of value as it now exists, we incur all the 
evil consequences of failure at home, and the cer- 
tainty of successful ^position abroad. We are,, and 
shall be, the greatest producers of silver in the world, and we have 
a larger stake in its complete monetization than any-other country. 
The difference, to. the United States between the general acceptance 
and th^ general destruction of silver as money in the commercial 
world will, possibly, within the next half century, equal the entire 

bonded debt of the nation, But to gain this advantage, 
we must make it actual moneyi the accepted equal 

of gold in the markets of the world. Remonetization 
here, foUov^ed by general remonetization in Europe, will secure to 
the United States the most stable basis for its currency that we 
have ever enjoyed, and will effectually aid in solving ail the 
problems by which our financial situation is surrounded. 

On the much vexed and long mooted question of a bi-metallic 
or mono-metallic standard, my own views are sufficiently indicated 
in the remarks I have made. I believe the struggle now going on 
in this country, and in other countries, for a single gpld standard, 
would, if successful, produce disaster in the end throughout the 
commercial world. The destruction of silver as money, and the 
establishment of gold as a sole unit of value, must have a ruinous 
effect on all forms of property except those investments which yield 
a fixed return in money. These would be enormously enhanced 
in value, and would gain a disproportionate, and therefore unfair, 
advantage over every other species of property. 

If, as the most reliable statistics affirm, there are nearly seven 
thousand millions of coin or bullion in the world, not very un- 
evenly divided betvy.een gold aiid silver, it is impossible to strike 
silver out of existence as money without results which will prove 
distressing to millions, and utterly disastrous to tens of thousands. 
Alexander Hamilton, in his able and invaluable report in 1791 on 
tlie establishment of a mint, declared that "to annul tlie use of 
either gold or silver as money is to abridge the quantity of circu- 
lating medium, and is liable to all the objections which arise from 
a comparison of the benefits of a full circulation With the evils of a 
scanty circulation.'* I take no risk in saying that the benefits of a 
full circulation, and the evils of a scanty circulation, are both im- 
measurably greater to-day than they were when Mr. Hamilton 



10 

uttered these weighty words, Always provided that the 
circulation is one of actual money, and not of 
depreciated promises to pay. 

HAMII^TON'S ARGUMKNT IK FATOR OF 

A BOUBLE STAKBARB. 

In the report from which I have already quoted Mr. Hamilton 
arg.iaes at length in favor of a double standa^fi, and all the subs.e- 
quent experience of ninety years has brought out no clearer 
statement of the case, or develpped a more complete comprehen- 
sion of this subtle and difficult subject. *'0n the. v/hole," says 
Mr. Hamiltony. •'' it seems most advisable not to attach the unit 
exclusively to either of the metals, because this cannot be done effec- 
tually without destroying the office and character of one of th=em 
as money, and reducing it to*the*situation of mere merchandise." 
Mr. Hamilton wisely concludes that this reduction of either of 
the metals to mere merchandise (I again^ quote his exact words) 
" would probably be a greater evil thai) occasional variations in the 
unit from the fluctuations of the relative value of the. metals, 
especially if care be taken to regulate the proportion between 
them, v/ith an eye to their average commercial value." I do riot 
thinjc that this country, holding so vast a portion of the world's 
supply of silver in its mountains and its mints, can afford to peduce 
the metal to the ** situation of mere merchandise." If silver ceases 
to be used as money in Europe and America, the mines of the 
Pacific slope will be closed and dead. Mining enterprises of the' 
gigantjc scale existing in this country cannot be carried on to 
provide backs for mirrors and to manufacture cream pitchers and 
sugar bowls. A aource of incalculable wealth to this entire 
country is destroyed the moment silver is permanently disused as 
money. It is for us to check that tendency and bring the conti- 
nent of Europe back to the full recognition of "the value of the 
metal as a medium of exchange. 



WHATEYER AFFECTS TIJEE PUBI.IC 

CREDITOR AFFECTS THE 
^WHOI^E FEOFI.E* 

Th(5 question of beginning anew the coinage of silver dollars 
has aroused .much discussion as to its effect on t^e public credit. 
The Senator from Qhio, Mr. Matthews, placed this phase of the 
subject in the very forefront of the debate— insisting, prematurely 
end iilogically I think, on a sort of judicial construction in advance, 



11 

hy concurrent resolution, of a certain law in case that law should 
happga to be passed b}r Congress. My own view of this question 

can be stated very briefly. I believe the public 'Creditor 
can afforA to b© paid ia any silver^ dollar that the 
UAited States, ©an aSbrd to coin and circulate. We 
have forty thousand millions of property in this 
counti^, and a larise self-interest will not permit 
us to overturn its relations b^ seeking for an 
inferior dollar whc^rewlth to settle the honest 
demand of any creditor^ The question might be 
different from a ^merely selSsh point of view if, on 
pajying tfie dollar to the public creditor^' it would 
disappear ^fter performing that function. But the 
trouble is that the inferior dollar you pay the 
public creditor remaiKi^j^n circulation to the ex- 
clusion of the Itetter ddfiar. That which you pay 
at home wl^l ^stay here ; that which you send 
abroad will com© back. 



TUB MeST BISTMjESSlKa EFFECT OF 

IKFKRIOM MOKEY ^I^WAVS 

FAl^I^S UFOH THE FOOK. 

Th0 intei^est of the' public creditor is indissolu- 
biy bound up with the. interest of the whole people. 
Whatever affects him affe^t^ us all ; and the evil 
that we might infiict upon him by paying an infe- 
rior dollar wonldl redodl upon us with a vengOance 
as manifold as the aggregate wealth of the republic 
transcends the comparatively small limits of our 
bonded debt. Bemember that ouv aggregate wealth 
is always increasing, and that our bonded debt is 
steadily growing less. If paid in a good silv§,r dol- 
lar the bondholder has nothing to complain of. 
If paid in an inferior slither dollar he has the same 
grievance that will be uttered still more plaintively 
by the holder of the National Bank bill, by the pen- 
sioner, by the day laborer, ^nd by the countless 
host of the poor, whom we have with us always, 
and on, whom the most digressing effect of inferior 
money will be ultimately precipitated. 



12 

THE PURPOSE ANO EFFKCT OF SII-VER 

I>EMONBTi;^ATION BV 
GFRMANY,. 

But I say, Mr. President, that the specific demand lor the 
payment of our bonds in gold coin, and in nothing else, comes 
with an ill gr^ace from certain quarters. European critiQsm is 
leveled against us, and hard names are hurled at us across the 
ocean for simply daring to state that the letter of our law de- 
clares the bonds to be payable in standard coin of July 14th, 
1870; explicitly declared so, and declared so in the intei-est of 
the public creditor, and the declaration inserted in the very 
body of the eight hundred millions of bonds that have been 
issued since that date. Beyond all doubt, the silver dollar was 
included in the standard coins of that public act. Payment 
at that time would have been as acceptable and as undisputed in 
silver as in gold dollars, for both were equally valuable in the 
European as well as in the American market. Seven-eighths of all 
our bonds owned out of the country are owned in Germ.any and in 
Holland. Germany has demonetized silver, and Plolland has been 
forced thereby to suspend its coinage, since the subjects of both 
powers purchase our securities. The Germau Empire, the very 
year after we made our specific declaration, for paying bonds in 
coin, passed a law destrgying, so far as lay in its power, the value 
of sihver as money; I do not say that it was especially aimed at 
this country, but it was passed regardless ofjts effect upon us, and 
was followed, according to public and undenied statement, ty a 
very large investment on the part of the German Government in 
our bonds, with a viev/, it was understood, of holding them as a 
coin reserve for drawing gold from us to aid in establishing^ their 
new gold standard at home. Thus by one move, the German Gov- 
ernmcint destroyed, so far as lay* in its power, the then existing 
value of silver -as money, enhanced consequently the value of gold, 
and then got into a position to draw gold from us at the moment 
of their need, which v/ould also be the moment of our own sorest 
distress. I do not say that the German Government, in these suc- 
cessive steps, did a single thing w^hich it had not a perfect right to 
do, but I do say that the subjects of that Empire have no reason to 
complain of our Governm.erit for the initial step which has im- 
paired the value of one of our standard coins. The German Govern-, 
ment, by joining with us in the rernonetization of silver, can place 
that standard coin in its old position, and make it as easy for this 
Government to pay, and as profitable for their subjects to receive, 
ihe one Snetal as the otherr 



15 

OUR I.ABORJERS MUST BK i:^i^SURBO A 

FUI*!. ©OLI^AR'S PAY FOR A BOI^ 

LAR'S WORTH OF WORK. 

Wh^n we pledged the public creditor in 1870 that our obliga* 
tions should be paid in the standard coin of that date, silver bullion 
was worth in the London market a fraction over sixty cents per 
ounce ; its average for the past eight 'months has been about fifty- 
four pence ; a price reckoned in gold in both cases. But the large 
difference is due in part to the rise in gold as well as to the fall of 

silver. Allowing for both causes and dividing tlie 
difference, it will be found, in the judgment of many 
of the wisest men of this eountry, perfectly safe to 
issue a dollar of four hundred and twenty-five 
grains standard silver ; as one that, anticipating the 
full and legitimate iniiuence of remonetization, 
will equal itself with the gold dollar, and effectually 
guard against the drain of our gold during the 
time necessary for international conference in re- 
gard to thb general re-establishment of silver as 

money, when that general re-establishment shall be effected 
with a coinage of fewer grains, the dollar which I am now advo- 
catiitg will not cause loss or embarrassment to any one. The miner 
of the ore, the owner of the bullion, the holder of the coin, and thp 
Government that issues it, will, all in turn, be be^nefited. It will 
yield a profit on re-coinage and will be advantageously employed 
in our commercial relations w^ith foreign counties. Mean- 
While it will insure to our laborers at home a full 
dollar's pay for a dollar's worth of work* I think 
wo owe this to the American laborer, 

TUB TRAOB DOI^JLAR FOR BARBARIANS^ 
- BETTER THAN THE STANOARB 
BOLLrAR FOR AMERICANS. 

Ever since we demonetised the old dollar we 
have been running our mints at full speed, coining 
a new silyer dollar for the use of the Chinese 
Coolie anrf the Indian Pariah— a dollar containing 
420 grains of standard Silver, with its superiority 
ovQr our ancient dollar ostentatiously engraved 
on its reverse side. To these " outside barba^rians " we 
send this superior d511ar, bearing all our national 
emblems, our patrlotio d^vic^s, our pious insorip^ 



14 

tlons, our goddess of liberty, opr defiant ea^le, our 
federal pnity, our trust in Go<l This dollajr con- 
tained seven and a half grains more silver' th^n the 
famous "Dollar of our Patk^r^'' propos^ to be 
reeoined by the pending bJlL^and more than four 
times-as many of the^e new aollars have aliready 
been poined a,a ever were coined of all othei? siiv/or 
dollars in th<e United States. 



AN INFERIOR I>OI.I^AR SHOUI.B NOT BE 

BY I.AW FORCEB UPON THE 
AMERICAN I^ABOREU^* 

In the ejxceptional and abnormal condition of 
the silver market now existing throughout the 
world, we have felt compelled to increase the 
weight of the ^oU^r with which to carry on the 
trade with the heathen nation^ of Asia* Shall we 
do less for the American laborer at ho^^? Kfay, 
shall we not dp a little bQttq? for those oC our own 
bloody an^ our own fireside? If you. remonetize tl^e 
dollar of the Fathers your mints will at, dnce be put at w6rk c^ 
two different dollars—different in weighty ^p^rent . in yalue,. 
different in prestige, different in their repytation and cutreiiGy 
throu^houl the commercial world. It will read"* strangely in 
history that the weightier and rnore "valuable of thjese dollars^ is 
made for an ignorant class of ^eatheii laborer's in 'China and ^ndia, 
and that the lighter and less valuable is made for the4ntelligent 
and educated laboring man who is a citizen of the United States. 

Charity^ says the adage, begins at home. Charity 
the independent Americaij. laborer scorns to ask, 
but he has the right to demand that justice shall 
begin at home. In his nam,e and iu the name of 
common sense and common honesty, I ask that 
the ^American Congress will pot force upon the 
American laborer an inferior dollar which the 
naked and famishing laborers of India and China 
refuse to accept. 

The bill which I now; offer as a substitute for the House Bill 
contains three very simple proposhi^ns" : 

IFirst:— That the dollar ^hall contain 425 grains 
of standard silver, shall have unlimited coinage, 
and be an unlimited legal tender. 



15 

^cpnd :— That all the profit of coinagd shall go 
to tjie Govprnment, and not to tho operator in 
silTer bullion. _ 

Third rs—Th^ silver dollars or silver bullion, assayed and mint- 
staii^ed, may" be deposited with the assistan^^Treasulrer at,New 
York, for 'W'lllch coin certificates may be issued, , the same in denomi- 
nation as United -States notes, not below, t^n doilarsj arid these shall 
be redeemable on deraahd iii coirwor bullion. We shall thus secure 
a paper circulation based on ah Wtual.^ deposit, of precious" metal, 
giving" us notes as valuably as tftose of the Bank of England, and 
doing away at oncp vyitU the dreaded. inconvenience of silver on 
account of bulk and weigrht. 



yVlE KEBO BOTM GOI-U AK».»II,VER, ATSPD 

yVM CAK HATB BOTM ONI^V BY 

MAJKIHG EACM TUB BiQUAI^ 

OF TMB QTMKR- 

I do not fail, Mr. President, t^. recognize 'that the committals 
and avowals of Senators on this q^uestion preclude thfe hope of my 
substitute being adopted. Indeed I do not fail to recognize that on 
this question.! am not in line with either extreme — with those who 
believe in the single gold standarcj, or those who, prematurely 

and unwisely, as X mu^- regard it, would^ force 
us to a single silver standard.. Either will be 
found, in mj jSdgnj-ent, a §reat misfortune to 
our country. We need bpth gold and silver, 
and "we can have both only by making each 

the eQ.lial of tho other.. It would not be difficult to show 
that, in. the nations^ Where both have been fully recognized and 
most widely diffused, the steadiest a^d most continuous p^psperity 
has beeii enjoyed— that true fotm of prosperity which reaches all 
classes,; but which begins with, the day laborers, whose toil lays 
the foundation of the whole superstructure cfc wealth. .The exclu- 
sively gold nation, like England, may show the most massive 
fortunes in the ruling' classes, but it shows also "the most helpless 
and hopeless poverty in the humbler walks of life. The gold arid 
silver nation, like France, can exhibit no Such individual- fortunes 
as abound in England, butMt has a peasantry whose silver savings 
can pay a war indemnity that would hare beggated the gold 
bankers of Lc^idon, and to which the peasantry of England could 
not have contributed a pound sterling in gold or even a shilling in 
silver. 



16 

AN INFERIOR SI1.VER OOI.I.AR OR CHEAI 
PAPER MONEV WOUI.I> BE BISASTROUS 

TO THE INTERESTS OF Al-i.. 

The effect of paying the laborer in this country 
in silver coin of full value, as compared with irre- 
deemable paper— or as compared, even, with a silver 
dollar of inferior value—will make itself felt in a 
single generation to the extent of tens of millions— 
perhaps hundreds of millions— in the aggregate 
savings which represent consolidated capital. It is 
the instinct of man, from the savage to the scholar- 
developed in childhood and remaining with age- 
to value the metals which in all lands are counted 
"precious." Excessive paper money leads to ex- 
travagance, to waste, to want, as we painfully 
witness to-day. With abounding proof of its de- 
moralizing and destructive effect, we hear it pro- 
claimed in the halls of Congress, that " the people 
aemand cheap money," I deny it. I declare such 
a phrase to be a total misapprehension— a total mis- 
interpretation of the popular wish. The people do 
not demand cheap money. They demand an abun- 
dance of good money, which is an entirely different 
thing. They do not want a single gold standard 
that will exclude silver and benefit those already 
rich, They do not want an inferior silver standard 
that will drive out gold and not help those already 
poor. They want both metals in full value, in equal 
honor, in whatever abundance the bountiful earth 
will yield them to the searching eye of science and 
to the hard hand of labor. 

The two metals have existed side by side in harmonious, hon- 
orable companionship as money ever since intelligent trade was 
known among men. It is well-nigh forty centuries since "Abra- 
ham weighed to Ephron the silver which he had grained in the 
audience of the sons of Herth, 400 shekels of silver, cujrent n\pney 
with the merchant" Since that time nations have risen and 
fallen, races have disappeared, dialects and languages have been 
forgotten, arts have been lost, treasures have perished, continents 
have been discovered, islands have been sunk in the sea, and 
through all these ages and through all these changes silver and 
gold have reigned supreme as the representative of value, as the 
media of exchange. The dethronement of each has been attempted 
in turn, and sornetimes the dethronement of both; but alv/ays in 
vain. And we are here to-day deliberating anew over the problem 
which comes down to us from Abraham's time ; the weight of the 
silver that shall be ^' current money with the merchant" 

As Mr. Blaine resumed his seat there was protracted applause in 
the galleries, 



The Wilson Bill and the Farmer* 

SPEECH OF 

Hon. Charles H. Grosvenor, 

OF OHIO, 
In the House of Representatives, Monday, February J7, tS96. 

The House having under consideration the bill (H. R. 5161) making appro- 
priations for the Department of Agriculture for the fiscal year ending June 
30, 1897. 

Mr. GROSVENOR said: 

Mr. Chairman: During the years that have passed over our heads, which 
involved the discussion of the Morrison tariff bill, the Mills bill, the bill of 
1890, the law of 1894, and the attempted legislation of the present Congress 
to relieve the Treasury from bankruptcy, a great deal has been said about 
the effect of our legislation upon the agricultural interests of the country, 
and we were told, in language more eloquent than I can hope to use, that 
the great aim and purpose of the Democratic party on this floor and in the 
country was to enlarge the scope of our markets in foreign lands for the 
productions of our agricultural interests. We were told that we were, by the 
law of 1890, building around the agriculturists of this country a Chinese wall. 
I remember listening with intense interest to a splendid argument by a dis- 
tinguished member of this house, now a distinguished member of the United 
States Senate, in which he argued from premises as follows: 

•'If you buy abroad, you may sell abroad; but if you do not buy the com- 
modities manufactured in foreign lands, you cannot have a market for the 
agricultural products of your own land." 

That is an argument as old as the discussion of this question, which is a 
hundred years and upward in this country; and yet it has always had to me 
a very interesting sound, and if we were driven to the discussion of theories, 
it seems to me this side of the Chamber, having the views that I do, would 
have difficulty in maintaining our position. 

The time has come at last in this country when we have something be- 
sides theories to go on. We are no longer driven to the consideration of 
theoretical propositions, of discussions that emanate from distinguished doc- 
trinaires of the colleges. They have become utterly valueless to the ear of 
the American voter, because the American voter has a lesson now based 
upon actual facts, based upon actual knowledge, based upon actual condi- 
tions, that answers conclusively all the theories and relegates into the obscur- 
ity which they deserve to occupy upon this question the men in the colleges, 
scientific men, who undertake to preach the doctrine of '* the fatherhood of 
God and the brotherhood of man," as applied to the question of the sale of 
the agricultural products of one's country. 

I hold in my hand, Mr. Chairman, a brief statement showing the effect 
upon the agricultural interests of this country in detail of the law of 1890, 
and the changes involved in the repeal of the law, the striking down of the 
section providing for reciprocity contained in the law known as the statute 
of 1890, the McKinley law, and I will add this statement to the remarks 
which I have here made: 



JEFFiaCT OF THFi WIIiSO^T liAW OJH FAKM PHOBCCTS. 

HOSTILE TO THE FARMERS-ASTONISHING RESULTS OF THE WILSON TARIFF 
LAW-A DEFINITE COMPARISON OF ITS WORKINGS WliH THOSE OF THE 
MCKINLEY LAW IN A GIVEN PERIOD NOW POSSIBLE FOR THE FIRST TIMB- 
A FALLING OFF OF S83,b00,000 IN THE VALUE OF AGRICULTLRAL PRODUCTS 
EXPORTED, WHILE THE IjtiPORTS HAVE INCREASED LARGELY. 
(By telegraph to the New York Tribune.) 

Washington, February 14. 

The great mass of citizens of the United States who are dependent on 
agriculture for a livelihood will perhaps be astonished to find to how gt«at 
an extent the new tariff law is discriminating against them, both in -the 
matter of the importation of their own products and the importation of for- 
eign products which compete with their own labor. They have had intima- 
tions of this in the fragmentary statements which it has been possible to 
present from time to time of the workings of the new law, but it is now pk)iB- 
sible for the first time to compare definitely from official publications the 
workings of the new law in a given period with those of the McKinley law. 
And the statement thus obtained shows that in practically every department 
of agriculture the new law has placed the great population of this country 
who are dependent on agriculture at a great disadvantage. 

The Treasui-y Department arranges its statements of the operations of the 
customs law in two different forms. At the close of the fiscal year, June SO, 
it presents a statement showing the amount and value of imports and exports 
during the twelve months ending at that date. At the close of the calendar 
year it presents a statement showing the imports and exports during the 
twelve months ending December 31. The operations of the McKinley 
law ended August 28, 1894; therefore, the last full year of its workings 
shown by any official statement in detail would be the year ending June 30, 
1894, which is usually termed the ** fiscal year 1894." The Wilson law went 
into effect August 28, 1894; therefore, the first full year's statement in detail 
which can be had of its operations is the calendar year 1895. Naturally, 
neither the old nor the new law worked normally during the few weeks pre- 
ceding or following the date at which the change was made — August 28, 
1894— and a c-omparison of the fiscal year ending a few weeks prior to that 
date with the calendar year beginning a few weeks after that date is essen- 
tially a fair one to both laws. Besides, it is the only method of comparing 
official statements of the workings of the two laws during periods of equal 
length nearest to the date at which the old law ceased to be operative and 
the new one went into effect. A comparison, therefore, of the imports and 
exports during the fiscal year ending June 30, 1894, with those of the calen- 
dar year beginning January 1, 1895, places side by side the two yearly oflBcial 
statements obtainable which most nearly touch on either side the date at 
which the change was made from the old to the new law. 

MIStEADIlVG DEMOCRATIC PROMISES. 

A good many of the 30,000,000 of people who are dependent on agriculture 
in this country, and who recall the fervor with which the Democratic states- 
men denounced the McKinley law as hostile to the farmer, and characterized 
the Wilson law as one which would be greatly to his advantage, will be sur- 
prised to learn that under the Wilson law the imports of farm products in 
competition with their own labor have been much greater than they were 
under the McKinley law, while the exports of farm products have fallen off 
since the repeal of the McKinley law. The orators who denounced the Mc- 
Kinley law and favored the Wilson law insisted that they were legislating 
in a way that would protect the farmer and yet increase his sales abroad. 
That their promises were misleading, inaccurate, and untrue is apparent 
from a comparison of the actual workings of the new law with *hose of the 
McKinley law. 

2 



In all the great articles of farm production, such as wheat, barley, wool, 
hides, tobacco, meats, flax, breadstuff s, hops, hay, hemp, cottoruand others, 
the importations have largely increased under the new law, while in the 
same class of articles the exportations under the new law decreased. These 
statements, it should be remembered, are based on official figures furnished 
by the Treasui-y Department, covering the years most nearly touching the 
date at which the change was made from the McKinley law to the Wilson 
law. In the fiscal year ended June 30, 1894, the last fiscal year under the 
McKinley law, the exports of products of domestic agriculture amounted 
to $628,714,773. In the year 1895, the first calendar year under the Wilson 
law, the exports of products of domestic agriculture amounted to only 
§545,714,375. This was a falling off of $83,000,000 in the amount exported. 
That the new law actually discriminates against the farmer is shown by the 
fact that but 67 per cent, of the total exports of 1895 under the new law 
were agricultural products, while over 72 per cent, of the exports in the last 
year of the McKinley law were agricultural products. 



THE OFFICIAIi FIGURES. 

The following tables show, from official reports of the Treasury Depart- 
ment, the imports and exports of farm products in the last fiscal year under 
the McKinley law compared with the first calendar year under the Wilson 
law. It may be worth while repeating the statement already made, that 
these two periods— the fiscal year ended June 30, 1894, and the calendar year 
beginning January 1, 1895— most nearly touch the date at which the change 
was made from the old to the new law of any annual periods covered by 
the official statements of the Treasury Department. The fiscal year 1894 
closed two months before the end of the operations of the McKinley law, and 
the calendar year 1895 began four months after the Wilson law had begun 
its work. Each year's figures may, therefore, be assumed to present a fairly 
normal picture of the working of the two laws, and thus to give for the 
first time since the enactment of the Wilson law an absolutely accurate 
official comparison of their operations as affecting the great class of citizens 
of the United States dependent on agriculture. (For Tables see page 4.) 

This statement shows conclusively that the low tariff, tariff reduction, 
tariff for revenue without revenue, such as we have now, has barred the 
access of American agriculturists to the markets of other countries of the 
world; that instead of the contention of the doctrinaires being worked out 
by actual observations and by actual conditions, we find ourselves being 
gradually driven out of the market and narrowed down in the sale of our 
agricultural productions to the markets of our own country, and those mar- 
kets circumscribed and cut down to the aggregate demands for agricultural 
products under the depreciation in value of the manufactured products of 
the country which are driven out of foreign markets, and hence the reduc- 
tion and decrease in the expenditures of the American laboring man and 
consumer. This is all I desire to say. The demonstrations which I will 
embody in my remarks are official, coming from Democratic sources alone, 
and they will more than prove the truth of my proposition. 

Mr. RICHARDSON. Then do I understand that low tariff benefits the 
home market? 

Mr. GROSVENOR. I say that it destroys the home market. I think you 
will find it plain when you read it. 

3 



Imports of fariu produeis. 

^ McKinley law, fiscal 

year 1894. 

Hides $17,270,637 

Tobacco 11,001,798 

Wines 6,739,425 

Wool 6,107,438 

Leather 4,508,330 

Cotton (unmanufactured) 3,010,205 

Rice 2,464,226 

Animals 2,411,066 

Seeds 2,395,695 

Breadstuffs (all) 1,981,317 

Provisions (all) 1,797,847 

Flax (unmanufactured) 1,336,845 

Cheese 1,247,198 

Hay 761,937 

Wheat 761,177 

Feathers 726,692 

Hops 484,415 

Barley 358.744 

Hemp 239,918 

Eggs 199,536 

£xpoHs of farm products. 

, McKinley law, fiscal 
year 1894. 

Cotton $210,869,298 

Breadstuffs (all) 166,774,558 

Provisions (all) 145,262,273 

Flour 69,271,760 

Wheat 59,470,041 

Lard 40,089,721 

Bacon 38,338,357 

Animals (all) 35,698,180 

Cattle 33,455,092 

Corn 30,211,154 

Beef 16,696,583 

Oil cake and meal 8,807,807 

Seeds (all) 7,941,935 

Cheese 7,180,232 

Distilled spirits 5,676,936 

Pork 5,067,773 

Clover seed 4,540,822 

Hides 3,972,487 

Hops 3,844,194 

Tallow 2,766,164 

Flaxseed 2,426,284 

Barley 2,379,714 

Sugar and molasses 2,209,265 

Oats 2,027,934 

Vegetables 1,740,604 

Hay 890,503 

Broom corn 210,742 

Eye 126,532 



Wilson law, calen- 
dar year 1895. 

$36,432,989 

15,225,726 

7,222,102 

33,770,159 

7,745,092 

5,171,099 

2,955,329 

3,365,123 

4,650,430 

2,886,736 

2,106,130 

2,239,920 

1,471,091 

2,191,635 

1,121,789 

3,033,626 

547,045 

501,137 

1,212,243 

219,459 



Wilson law, calen- 
dar year 189S . 

$189,890,645 

125,604,486 

132,456,843 

50,292,886 

40,898,547 

37,348,753 

37,411,944 

33,791,014 

26,997,701 

27,907,766 

16,522,018 

7,851,246 

1,983,894 

3,401,117 

1,685,460 

4,430,155 

1,126,618 

2,835,947 

1,745,945 

1,207,350 

31,076 

1,485,038 

1,886,672 

599,835 

1,557.467 

698,934 

179,856 

724 



SILVER AND THE FARMER. 



Present Prices and those of 1873. 



From the Congressional Record of February i3, 1896. 



THE INTEREST OF FARMERS. 

Except the natural desire of every American to see ail of our Indus- 
tries prosper, and out natural anxiety to do everything reasonable to bring 
about that result, what possible interest can farmers have in this move 
of the silver miners for their own special benefit? Our broad acres yield 
no silver, and we have no personal interest in the problem of finding a 
market for it. When in 1890 we were driven to a compromise with these 
men (who then as now controlled the Senate) whereby we undertook as 
a nation to do what we never have done for any other industry, namely, 
furnish a market for the WHOLE PRODUCT and more, what was the re- 
sult? 

These same men assured us then that the act of 1890 would "restore 
the price of silver and sustain it," By that act this nation obligated 
Itself TO BUY every month 4,500,000 ounces of silver, or 54,000,000 ounces 
each year. This exceeded by far the entire product of the country; so 
that we really undertook to furnish a market not only for what wa^ 
then being produced, but also for al that they believed the country capa- 
ble of producing. 

What was the result of the act o 1890? There were two: 

1. After a short-lived increase in price, due to speculation based on 
the hope that silver would advance, the price of silver. FELL FASTER 
AND FARTHER THAN EVER BEFORE IN HISTORY. Why was this? 
Simply because our production of silver, which had averaged annually 34,- 
000,000 ounces for the ten years just preceding the passage of the act, 
leaped to 54,000,000 In 1891 and to 62,000,000 in 1892, and seemed capable 
of almost Indefinite expansion. And, as a consequence, the price of silver 
was ahown to be capable of almost Indefinite fall. 



2. The second and immensely greater result was the financial PANIC of 

the spring and summer of 1S93. The repeal of the purchase clause of the 
act in August, 1S93, ended the panic, though other causes have continued 
with Us the industrial depression. In the spring and summer of 1S93 it was 
almost impossible to borrow money on any kind of security. After the re- 
peal of the purchase clause men with good security could borrow all the 
money that they wanted. As I said, the panic subsided, but the business 
depression still continues. There is plenty of money for investment, but 
few dare to risk it. 

WHAT THE SILVER BARONS DID FOR US. 

These were the deplorable results of yielding to the dictation of the 
silver barons in 1890. And similar in kind, but far worse in degree, would 
be the result of yielding to their present demand. 

To come back to my question, What possible interest can farmers have 
in this problem which the silver miners are trying to solve, namely, of find- 
ing a market for their silver? What inducement do the silver producers 
hold out to the farmers to get them to co-operate in this scheme? They 
promise the farmers higher prices for their products. The sensible ques- 
tion which every thoughtful farmer will naturally ask is, Could they and 
would they keep their promise? Let us see what the chances are. 

They claim that "silver would increase in value, and would carry with 
it the prices of farm products." 

To say that there is any relation between the price of a metal dug out 
of our Western hills (depending for its value upon conditions peculiar to 
itself) and the price of any of the vegetable products of our fields (each of 
which depends for its value upon a set of conditions peculiar to itself) — to 
tell men that there is any relation between the prices of things so differ- 
ent in their nature and uses, is to insult the intelligence of thos'^, who 
are addressed. 

But looking at it from another standpoint, let us see what the other 
probabilities are that the promise could be kept. 

One would think to hear these gentlemen talk that silver production 
is one of the overshadowing industries of this country. Let us make a 
few comparisons. 

The total value of the silver product of the United States in 1892, even 
when reckoned at the price before 1873, was $S2,101,0(X), and this was the 
greatest yield in the history of our silver production (Mint Report, page 
242}. 

FARM VALUE OF THE COTTON CROP. 

Acccrding to the Statistical Abstract, page 267, the farm value of the 
cotton crop of this country in 1891 was $350,000,000; that of the wheat 
crop was, in round numbers, $400,000,000; and that of the corn crop was 
over $800,000,000. . The value of the corn crop alone was ten times the 
value of the silver crop of this country, and four times the value of all 
the silver produced in the whole world that year. Why, sir. the clucking 
hens of our farms produce more wealth every year than these silver 
miners, who so patronizingly tell the farmers what they will do for them. 
(Applause.) 

Now, let us look at some actual results. Take, for example, cotton, 
about which these gentlemen have so much to say. Let us compare the 
prices of that staple under conditions as fair as possible. To compare 



prices that had been inflated by a period of war (as those in the early 
70*8 were) with those at the end of a long period of peace, is not a method 
by which the truth can be established. Let us compare the prices for 
some years at the end of a long period of peace, when we had "free silver," 
with those during a similar period now. Let us compare the prices from 
1S41-1S49 with those of 1885-1894. 

The following table is made from data furnished by the Agricultural 
Department. Material for the further study of the subject may be had 
by applying to the department for its pamphlet on Production and Prices 
of Cotton for 100 Years. 



1841 . 

1842 . 
1843- 
1844, 
1845 
1846 
1847 
1848 
1849 



Production and prices of cotton in 1841-1849. 



Year. 



Average 



Prices in New York. 



Crops. 



Bales. 

1,634,954 



1,683,574 
2,378,875 
2,030,409 
2,394,503 
2,100,537 
1,778,651 
2,439,786 
2,866,938 



2,145,357 



1,0 west. 



Cents. 



7 
5 

6/8 

5^ 
5 

8H 
6 



6i 



Highest. 



Cents. 

11V2 

10^ 
8^ 
9% 
6K 
9^ 

13?^ 

13 

10^8 



loj 



Average. 



Cents. 
9-50 
7.85 
7.25 
7.73 
5.63 
7.87 
1 1. 21 
8.03 
7-55 



8,07 



Production and pries of cotton in i88s-i8g4. 



1885 



1890 
1891 
1892 
1893 
1894 



Average 



5,706,615 
6,575,691 
6,505,087 
7,046,833 
6,938,290 
7,311,322 
8,652,597 
9.035,379 
6.700,365 

7,549,817 



7,202,154 



9.7 


10.7 


9/8 


10 


9H 


11^8 


9^ 


II 


ioi| 


IlM 


12% 


7ii 


10% 


Wa 


It 


10 

8t% 


8^ 


iotV 



10.54 
9.44 
10.25 
10.27 
10.71 

11.53 

9>03 
7.64 
8.24 
?.67 



9,53 



HIGHER PRICES SINCE 1885. 

Even a very brief examination of the above figures will reveal several 
significant facts. Though the size of the crop was immensely greater each 
year of the second period than in the first, the price in the latter period 
never fell so low as in the former, while the average prices in the second 
period were much higher than in the first. These are New York prices; 
and, as it cost less for the planter to get his cotton to New York in the sec- 
ond period, the farm price has been thereby increased still further. Cotton, 
therefore, commands a better price to-day than when we had similar con- 
ditions under free coinage. 

Farmer friends of mine in Minnesota have told me that before the war 
they have hauled wheat fifty miles to the market with an ox team, occu- 
pying days in each trip, and got forty-five cents a bushel for it in wild-cat 
money, which was in danger of being worthless when they got home. Yet 



In those days the miixt was open to the "fret; and unlimited colnaije of sil- 
ver." (Applause.) 

So much has beeni said by free silver orators to mislead farmers into 
the idea that everything was prosperous with them before 1873 and noth- 
ing- has been since, that 1 submit now a paragraph that I have copied 
from the report of the Iowa State Agricultural Society for 1873. It is from 
an address delivered by C. H. Rogers at the Harrison County Fair, and 
gives a faithful picture of the situation at that time in that mighty State: 

"Proud of these aspects and of her progress in practical agriculture, still 
the condition of the laboring man and farmer is far from what is desirable. 
They have worked, wat hed and waited for an adequate reward until weari- 
ness has well-nigh turned to helplessness. Farming has been a financial fail- 
ure for the past three years. Hard toil has opened up fine farms and 
brought to the bins the products of unexampled harvests, but the sales have 
hardly paid expenses and bought cheap clothing until the coming harvest. 
There is no surplus to improve buildings, purchase thoroughbred stock and 
furnish the home with any of the luxuries of art and literature," 

LOW PRICES liN I&73. 

The Annual Report of the Iowa State Agricultural Society for 1873 gives 
the price of corn at the capital of Iowa in December, 1870, at 25 cents; in De- 
cember, 1871, at 21 cents; in December, 1872, at 16 cents. 

The price of all our staple products for every month in the year 1873 is 
preserved in the same report (the greenback prices, be it remembered) as fol- 
lows: 



January 
February 
March . . 
April . . . 
Ma.y . . . 
June . . . 
July . . . 
August . . 
September 
October . . 
November 
December 



Wheat. 


Rye. 


Barley. 


Corn. 


Oats. 


$0.95 


$0.33 


Jo .40 


$0.16 


$0.20 


I.IO 


■35 




4.5 


• »7 


.20 


I.OO 


.35 




45 


• 17 


.20 


l.tX) 


•35 




45 


.18 


.20 


I.IO 


.45 




45 


.22 


.22 


I.IO 


.35 




40 


.23 


.28 


.85 


•35 






.20 


.20 


.85 


.35 




50 


.22 


.20 


.75 


.45 




60 


.22 


.27 


.75 


•45 




70 


.22 


.27 


■75 


.40 




70 


.22 


.20 


.85 


.40 




70 


.22 


•23 



Hay. 



$6.00 
6.00 
6.00 
6.00 
6.00 
6.00 
6.00 
5.00 
5.00 
5.00 
5.00 
5 00 



The averag© price of pork in Iowa for the season of 1871-72 was $3.74, 
and for the season of 1872-73, $3.52. 

Let any man turn to the files of his local paper during the administration 
of President Harrison and see how actual farm prices compared with the 

auuve, - 



SILVER AND THE DEBTOR 



** But if there is any debtor who fancies that the election of 

a free=silver President and Congress would be of 

advantage to him, let him not be deceived." 



From the Congressional Record of February 12, 1896. 

There are some men now struggling with debt who have felt them- 
selves tempted to support the free coinage of silver just because it would 
debase our currency, or, as they say, would give us a cheaper dollar and 
enable those who are in debt to pay more easily. In answer to the chid- 
ings of conscience they have said: "The dollar has been raised in value 
by legislation, now let it be lowered for a while in the same way." If the 
first part of their statement were true there would be both justice and rea- 
son in their demand; but as the premises are false the conclusion is unwar- 
ranted. There is only one way for an honest man to do, and that is, ex- 
actly as he agreed to do. His moral obligation is discharged only when 
he returns the kind of money that he borrowed. 

But if there is any debtor who fancies that the election of a free-sil- 
ver President and Congress would be of advantage to him, let him not 
be deceived. 

The men chosen this fall will not take their seats until the 4th of 
March next, four months afterward. Unless convened in extra session, the 
Fifty-fifth Congress will not assemble until nine months later still. 

Let us suppose that the advocates of free silver sweep everything 
before them, capturing the Presidency and the House, and continuing to 
control the Senate. What would be the natural thing to expect? What 
would you do if some one owed you and you were not protected by a gold 
clause in the contract? You would demand what was coming to you. 
Every man having an obligation coming due would, in self-defense, de- 
mand all that might be coming to him while he could still get paid in 
money of full value. Debtors would be compelled to pay up at once or 
give new and better security with a promise to pay in money of the present 
standard. On the maturing of their obligation they would certainly have 
to pay an enormous premium for the kind of money required. They would 
not escape making payment in money of the present standard, and would 
have to take their chances of getting enough more for their products to 
enable them to make the payment without actual loss. They certainly 
would not gain anything, and would take all the risk of losing— losing not 
only the premium which they would surely have to pay, but depending 
upon the forbearance of their creditors not to lose all they possess. 

And what is the probability of the creditor being able and willing to 
grant concessions? Depositors in banks would withdraw their deposits. 
This would compel the banks to call in their loans. The four months be- 
tween election and inauguration would be strewn with the wrecks of 
business houses now giving employment to millions of people. Gaunt ruin 
would stalk through the land, visiting every city, every village, every 
neighborhood, carrying dov.'n to destruction the bravest and best of the 
captains of industry. Panic, unreasoning panic, would seize the people. 
We know what even the possibility of going to the silver basis did in 1893; 
who can compute the effect that would be produced by the absolute cer' 
talnty of its early arrival? The financial storm that swept over this 
country in 1893 would be a gentle zephyr compared with the cyclone which 
would then overtake us. 

Creditors, as a rule, would therefore be unable, no matter how well dis- 
posed, to grant concessions to those who were owing them. Ninety-nine 
per cent, of those who are in debt would be swept away. We who are in 
debt, sir, are the ones most vitally interested in the defeat, the over- 
whelming defeat, of every proposal for the free coinage of silver. 



Bryan on the Tariff. 



lerTRACTS FROM HIS SPEECHES IN THE HOUSE OF REPRESENfATlVSS, 
MARCH l6, 1892, AND JANUARY I3, 1894. 



"The law laid down in these cases is sound, and justifies us in 
declaring that this Government has no right to use the taxing power 
either directly by bounty or indirectly by a protective tariff." [Extract 
from Bryan's speech, January 13, 1894.] 



«*That is the inspiration of the Democratic party; that is its aim 
and object. If it comes, Mr. Chairman, into power in all of the 
departments of this Government, it will not destroy industry; it 
will not injure labor ; but it will save to the men who produce the 
wealth of the country a larger portion of that wealth. It will bring 
prosperity and joy and happiness, not to a few, but to every one 
without regard to station or condition." [Extract from Bryan's speech, 
Wednesday, March 16, 1893.] 



(From the Congressional Record.) 
Washington, D. C. 



I desire to say that I am in hearty sympathy with the majority of the 
committee in its decision to attack the tariff in detail ; and I think that the 
bills which have been reported and the bills to be reported will fully answer 
the argument of the gentleman that we are making only a slight assault upon 
the system. ^ * * * ** * * * 

The reduction which we have made in the tariff vipon manufactured 
articles is a great reduction in existing schedules. It is not as great a reduc- 
tion as might be made. I believe that we have left far more tariff than can be 
shown to be necessary to provide for any difference, if there be any difference, 
between the cost of manufacture here and abroad. But I am led to agree to 
this moderate reduction of the tariff upon manufactured articles for two 
reasons : first, because, in going from a vicious system — and I believe that our 
present system is a vicious system, created by the necessities of M^ar and con- 
tinued by favoritism — because, I say, in going from a vicious to a correct 
system the most rapid progress can be made by degrees. 



PROTECTIONISTS COMPARED TO PICKPOCKETS. 

There is a difference between a man coming to this Congress and demand- 
ing that other people shall be subjected to a tax for his benefit and a demand 
on the part of those taxed to be relieved of the burden. Is there not a differ- 
ence between these these two principles ? It seems to me that the difference 
is as marked as between day and night. It is simply this difference, sir : The 
man who says, " Impose upon somebody else a tax for my benefit," says what 
the pickpocket says, " Let me get my hand into his pocket ; " but the man 
who says, " Take away the burdens imposed on me for other people's benefit," 
says simply what every honest man says, "Let me alone to enjoy the 
results of my toil." I repeat, is there not a difference between these two 
principles ? 

I want to state, as emphatically as words can state it, that I consider it as 
false in economy and vicious in policy to attempt to raise at a high price in 
this country that which we can purchase abroad at a low price in exchange for 
the products of our toil. [Applause on the Democratic side.] 



EVERYTHING SHOULD BE ON THE FREE LIST. 

I WILL SAY THIS, THAT SPKAKING FOR MYSELF, I SHALL 
BE GLAD TO PUT ON THE FREE LIST NOT ONLY THE MACHIN- 
ERY FOR MANUFACTURING BINDING-TWINE BUT FOR MANU- 
FACTURING ALL THINGS. 

Mr. McKENNA. do YOU REALLY BELIEVE THAT THE PRO- 
TECTIVE POLICY IS SIMILAR TO THE PICKPOCKET'S POLICY OF 
PUTTING A MAN'S HAND INTO ANOTHER MAN'S POCKET AND 
EXTRACTING MONEY FROM IT? 

Mr. BRYAN. YES, THAT IS MY BELIEF. 

Mr. McKENNA. Now, then, one other question. You can answer it 
all together. If that is so, how do you justify your position, not in economics, 
but in morality, for reporting a bill which leaves 39 per cent, taxes on 
woolen clothing? 

Mr. BRYAN. "Mr. Chairman, if I found a robber in my house who had 
taken all I had, and I was going to lose it all or else get one-half back, I would 
take the half. [Laughter and applause on the Democratic side.] I wiU ask 
the gentleman from California whether he would refuse to give the people any 
relief because he could not give all that he wanted to give ? 

Mr. McKENNA. No. 

Mr. BRYAN. Then we agree. [Applause.] 

Mr. McKENNA. No, we do not. If I was in a position of power, being 
a member of the Committe on Ways and Means, and believed that my vote 
would relieve this country from a system of policy which was simply a system 
of pickpocketing, I would never consent to vote for a bill that way. 

Mr. BRYAN. In that respect the gentleman from California and the 
gentleman from Nebraska do not think alike. ***** 



MR. BRYAN ANSWERED. 

Under 3'our protective party banner you went to the country and boasted 
that 3^ou had fastened on the people a law which they could not change for ten 
years. But you were as ignorant of the power of the people as you were 
careless of their welfare. You say that we deceived them ; that we exceeded 
you in misrepresentation. You have the consolation of knowing that if we did 
it was the first time we ever went beyond you in that respect. [Laughter and 
applause on the Democratic side.] But we did not. Because as a successful 
fabricator the average Republican will be recognized as one the latchet 
of whose shoes we are unworthy to unloose., [Laughter on the Democratic 
side.] 

No ; the people knew what you were doing ; they knew what you 
had done, and they rose in their might and hurled you from power , and to-day 
the once proud Republican party, that used to take the election of President 
as a matter of course, thinks it worth while to announce to this body through 
the gentleman from New York [Mr. Rainks] that the Republican party has 
made a gain in supervisors in New York. [Laughter and applause on the De- 
mocratic side.] 

Mr. RAINES. Let me suggest to the gentleman that all the people are 
getting as a result of the change is free wool, free binding-twine, and free 
cotton ties. 

Mr. BRYAN. I only hope, Mr. Chairman, that what the gentleman says is 
true, and that they will get these things. I hope that the body at the other end 
of this Capitol, which differs from us in the political complexion of its majority, 
will not stand between the people and this relief. [Applause on the Democratic 
side.] 

Yes, sir ; they boasted that nothing could be done ; that they had the 
people bound hand and foot. Where are those conspirators to-day ? Where 
the men who were the most largely instrumental in fastening that iniquitous 
legislation on this country? When they went back to their people the ex- 
pression of confidence was in the other man. 

Mr. RAINKS. ONE OF THEM IS GOVERNOR OF OHIO. 



PROTECTION COMPARED TO THE CANNIBAL TREE. 

Out in the West the people have been taught to worship this protection. 
It has been a god to many of them. But I believe, Mr. Chairman, that the 
time for worship has passed. It is said that there is in Australia what is known 
as the cannibal tree. It grows not very high, and spreads out its leaves like 
great arms until they touch the ground. In the top is a cup, and in that cup 
a mysterious kind of honey. Some of the natives worship the tree, and on 
their festive days they gather around it, singing and dancing, and then, as a part 
of their ceremony, they select one from their number, and, at the point of 
spears, drive him up over the leaves onto the tree ; he drinks of the honey, he 
becomes intoxicated as it were, and then those arms, as if instinct with life, 
raise up ; the)' encircle him in their folds, and, as they crush him to death, his 
companions stand around shouting and singing for joy. 



Protection has been our cannibal tree, and as one after anoth^ of onr 
farmers has been driven by the force of circumstances upon that tree and has 
been crushed within its folds his companions have stood aroumd amcl shomtad, 
"Great is proteetion " 

THE PROMISES OF 1892. 

That is the inspiration of the Democratic party ; that is its aim and object. 
If it comes, Mr. Chairman, into power in all of the departments of this Govern- 
ment it will not destroy industry ; it will not injure labor ; but it will save to 
the men who produce the wealth of the country a large portion of that wealth. 
IT WILL BRING PROSPERITY AND JOY AND HAPPINESS, NOT TO 
A FEW, BUT TO EVERY ONE WITHOUT REGARD TO STATION OR 
CONDITION. 

[From his Speech, January 13, 1894.] 

HIGH PRICE OF AGRICULTURAL PRODUCTS. 

Mr. BRYAN. I will append to my remarks a brief table showing that the 
balance of trade was against us $2,000,000 in 1889 ; was in our favor $68,000,000 
in 1890 ; that the balance in our favor fell to $39,000,000 in 1891, and then rose 
to $202,000,000 in 1892 ; and from that great height fell to $18,000,000 against us 
in 1893, the last-named year ending before the Democratic Administration had 
been in control five months, and before any change occurred in our 
tariff laws. 

The table also shows that the great increase in exports in 1892 over 1891 
was due entirely to the large amount and high price of agrieultural exports for 
that year. The increase in agricultural exports alone was greater by $11,000,000 
than the total increase in exports of all kinds, while the value of exports of 
manufactured products fell off more than $10,000,000 from 1891 to 1892, and a 
half-million more in 1893. Manufactured products constituted 19.37 per cent, 
of our total exports in 1891, and only 15.61 per cent, in 1892, while the agricul- 
tural exports constituted 73.69 per cent, of the total in 1891, and 78.69 per cent, 
in 1892, while they fell to 74.05 per cent, in 1893. The export price of wheat 
in 1891 was 93 cents per bushel; in 1892, $1.03 ; and in 1893, 80 cents. The 
export price of corn meal and wheat flour rose in 1892 and fell in 1893. 

DEFENSE OF THE WILSON BILL. 

The Wilson bill is not draw^i in absolute conformity to any one of these 
plans. The committee has recognized that it had to deal with a system vicious 
in principle and yet present with us, and it seemed wiser to make a journey 
toward an ultimate revenue tariff than to attempt the accomplishment of it by 
a single enactment. The bill makes many reductions of prohibitory duties, so 
that in such cases the revenue will be increased rather than diminished. ON 
OTHER ARTICLES IT BOTH REDUCES THE RATE OF DUTY AND 
THE AMOUNT OF REVENUE, believing that the tax is greater than the 
people should bear even for revenue on those particular articles. 



One very important feature of the bill i* th« addition to the fr«« list of 
several articles classed as raw materials. Perhaps, technically speaking, there 
is nothing separated from realty and having value which can be called abso- 
lutely raw material, but, commercially speaking, those things are called raw 
material which lie at the basis of great manufacturing enterprises, and which 
are only utilized after conversion into a finished product. 

Wool, for instance, is the chief raw material in the woolen industry, and it 
has been placed upon the free list. * * be- 

speaking for myself, it is immaterial in my judgment whether the sheep- 
grower receives any benefit from the tariff or not. Whether he does or does 
not, whether the wool manufacturer collects a compensatory duty from the 
consumer of woolen goods and pays it over to the wool-grower, or collects it 
and keeps it himself, or dosen't collect it at all, and thorefore does not need it, 
I am for free wool. 

THE WHOLE SYSTEM OF PROTECTION DEPENDS UPON A 
CORRUPT CONSPIRACY BETWEEN THOSE WHO SHARE, OR 
THINK THEY SHARE, THE PLUNDER WHICH IT SECURES. 

Coal is another raw material placed upon the free list. The duty on coal 
is indefensible. 



FAVORS OPENING THE FLOOD=QATES OF FOREIGN 
COMPETITION. 

I BELIEVE THAT INSTEAD OF PREVENTING FOREIGN COUN- 
TRIES FROM DELUGING US WITH SOMETHING WHICH THEY 
CAN SELL US CHEAPER THAN WE CAN PRODUCE IT, WE HAD 
BETTER LET THE FLOOD COME. 

Mr. TURPIN. I would like to have my friend tell me how the committee 
justifies itself in putting coal on the free list and wool on the free list, and yet 
allowing Mr. Sloane's factory in New York a duty of 35 per cent, when he is 
selling carpets in Dublin, Ireland, at a profit. 

Mr. BRYAN. I do not believe Mr. Sloane needs a single cent of pro- 
tection. ' 

Mr. PICKLER. What do you give it to him for, then ? 

Mr. TURPIN. That is what we want to know. 

Mr. PICKLER. Why is it that you put wool on the free list to the detri- 
ment of us wool-growers? Why don't you put the products of Eastern 
manufacturers on the free list ? 

Mr. BRYAN. Will you help us to do it ? 

Mr. PICKLER. I will help you thus far. I am in favor of protecting all 
industries alike to a reasonable extent. I am not in favor of making the farmer 
bear all the brunt, as you make him do in this bill, and yet give protection to 
the manufacturers in the East. [Applause.] That is what you do by this bill. 

Mr. BRYAN. The gentleman from South Dakota [Mr. Pickler] was com- 
plaining to-day because we would not allow the egg producers of this country 
to tax the egg consumers, and as long as he asks for a tariff on eggs he must 
•ubmit to it on manufactures. 



Mr. PICKLER. Would not the gentleman do well to take more care of the 
wool-growers and egg producers and let the representatives of the consumers 
of those products take care of them ? The gentleman had better take care of 
the farmers of the North-west, whom he in part represents. 



SOMETHING THAT DOES NOT BENEFIT THE FARMER. 

Mr. BRYAN. If the gentleman who represents the farmers of South 
Dakota, would help to take care of the farmers instead of standing up for 98 
per cent, duty on the woolen goods which his people wear and for an average 
of 50 per cent, on the tariff schedule, he would do them a better service. 

Mr. PICKIvER. Our people do not pay a cent of that. We do not wear 
broadcloth out there. [Ivaughter]. * * * 

I want to revert to my original question. I want the gentleman to justify 
himself and the committee in putting farm products on the free list and yet 
protecting the Eastern manufacturer. 

Mr. BRYAN. Mr. Chairman, this biU brings to the farmer — 

Mr. PICKLER. Nothing. 

Mr. BRYAN. Ten dollars for every dollar it takes from him. 

Mr. PICKLER. It brings him nothing. It stabs him at every corner. * 

* ^ ^ * How about barley ? 

Mr. BRYAN. The tariff on barley is a tariff from which some may receive 
a benefit, and we left a tariif on barley. 

Mr. PICKLER. Not enough to do any good. You reduced it from 30 
cents to 10 cents. It will not keep a bushel of Canadian barley out of this 
country. 

Mr. TURPIN. I want simply to remind my friend that he has answered 
the gentleman from South Dakota, but the "gentleman from Alabama" he has 
not answered. 

Mr. BRYAN. Repeat your question, please. 

Mr. TURPIN. I asked why it was that you put coal and wool on the free 
list and allowed the carpet manufacturers, Mr. Sloane for instance, to retain a 
duty of 35 per cent. I ask if you do not think that as there is a duty of 75 cents 
a ton on iron ore and coal, and from this we received nearly a million dollars re- 
venue on each last year ; if they lower it to 50 cents, on which no doubt there 
would be a revenue of $4,000,000 or $5,000,000, do you not think it would be 
better to have a small duty on those things and a lesser one on carpets, that 
you say do not need any protection, and thus increase the revenue on all three 
of these articles? 

Mr. BRYAN. Mr. Chairman, in the first place, I believe we can make no 
permanent progress in the direction of tariff reform until we free from taxation 
the raw materials which lie at the foundation of our industries ; and I believe 
in free iron ore, whether we leave the tariff at 35, 25, or 5 per cent, upon carpets. 
A tariff of that kind on carpets may be too high now. I think it is not 
necessary even for the purpose of protection, as I have already stated. 
Mr. TURPIN. Then why did you put the duty on ? 

Mr. BRYAN. I think the duties all the way through this bill are higher 
than necessary, and I favor the bill, not because of its perfection, not because 

6 



the duties are brought down as low as tliey might be, but because the bill is in- 
finitely better than the law w^hich we now have, and is A STEP IN THE 
RIGHl DIRECTION. [Loud applause.] 

IRON ORE, LUMBER AND THE SUGAR BOUNTY. 

Iron ore was placed upon the free list for the same reason that wool was 
made free. It is the basis of a great manufacturing industry. 

Rough lumber has been placed upon the free list, and only a slight duty 
retained on planed and grooved boards. We found a rate of 34. 12 per cent, and 
left a rate of 23-65. 

Now, Mr. Chairman, there is another provision in this bill to which I shaU 
very briefly invite your attention. The bill provides for a gradual repeal of 
the sugar bounty — one-fourth of one cent to be dropped each year. It also re- 
duces the tariff on fine sugar one-half. I believe that this is the best solution 
possible at this time of the difficulties surrounding this schedule. Some have 
advocated the immediate repeal of the bounty and the impos tion of a tariff on 
sugar. Others have favored the repeal of the bounty without a duty on sugar. 
I do not believe it is possible to secure the passage of this bill through both 
Houses unless it provides either for a tariff on imported sugar, or for a bounty 
on sugar produced in this country. When I was compelled to choose between 
a gradual reduction of the bounty and the restoration of a sugar tariff I chose 
the former without hesitation. 

THERE IS NO QUESTION THAT WE TO-DAY MANUFACTURE 
SHOES AT A LOWER COST PER SHOE THAN ANY COUNTRY IN THE 
WORLD, AND YET THE WAGES PAID PER DAY ARE PROBABLY 
DOUBLE THE WAGES PAID IN THE SAME INDUSTRY IN ANY OTHER 
COUNTRY. I AM WEARING A PAIR OF SHOES MADE BY THE 
MORSE-COE SHOE COMPANY OF OMAHA, NEB. NO SHOE FACTORY 
IN FOREIGN LANDS APPROACHES THEM IN WAGES PAID, AND YET 
THEY CAN PRODUCE A SHOE EQUAL IN QUALITY AND PRICE TO 
THOSE PRODUCED ABROAD. WE HAVE ONLY LEFT 20 PER CENT 
ON BOOTS AND SHOES IN THE PRESENT BILL AND HAVE REDUCED 
THE TARIFF ON UPPER AND SOLE LEATHER. 



HOME OF THE AMERICAN WORKINGMAN. 

The gentleman from Pennsylvania [Mr. Brosius], who lives in the very 
strong-hold of protection and, therefore, knows whereof he speaks, made a 
speech on the tariff less than two years ago, and in the course of the speech 
described a laboring man's home. Let me read this description, for I am sure 
the House will be delighted to know just how the average Pennsylvania 
workingman's house is furnished. The gentleman from that State [Mr. Brosius] 
was describing the scene as it would appear to one of our forefathers if he 
could return to the haunts of men. Here is the picture : 

"The vision of the cosy little parlor strikes him with wonder. The paper 
on the wall, exceeding in richness of coloring anything he had before seen ; 
the pictures, the softly -cushioned chairs, the finely painted woods, the family 



photographs on the mantel, the clock ticking in the midst, the gaudy chande- 
lier, the melodeon in the corner, with its polished case and ivory keys, are all 
objects of splendor such as he had never before seen. The extravagance of the 
window curtains, which seemed to him of the finest lace, might well call down 
his condemnation. I^ooking in the next room he sees a lady dressed like a 
governor's wife. The snow white sugar, the china cups, and the white table- 
cloth all excite his curiosit}^ He looks in the bedroom and piles of pure white 
linen and muslin apparel greet his vision. He hears a sound in the direction 
of the parlor, and he sees as he turns to follow it two beings enter whom he 
at first glance takes for fairies. They are two little children dressed in a pro- 
fusion of muslin garments with such decorations of stitchwork that he feels 
like condemning such extravagance. 

"Is it possible, he says, that the rich men of our posterity will be allowed to 
make such a display of their extravagances. Michael now breaks in upon his 
wonder with the inquiry : 'Who do you think lives in this house?' The deacon 
replies: 'I suppose some governor or, more likely yet, some wealthy nobleman 
who came over here from England to corrupt our people by his ostentation and 
extravagance.* Michael now disillusioned his mind by saying : 'Not at all, 
my good fellow ; the man who lives in this house is a bricklayer.'" [lyaughter.] 

AYE, SIR, IF THIS BILIv IS SECTlONAIv, IT IS NOT DRAWN TO 
GIVE SPECIAIv PROTECTION TO THE INTERESTS OF THE SOUTH ; 
BUT THE SOUTH IS JUSTIFIED IN VOTING FOR IT. WHY ? BECAUSE, 
SIR, YOU CAN NOT AID THE SOUTH AND WEST BY MEANS OF 
PROTECTION. 

THE LAW IvAID DOWN IN THESE CASES IS SOUND, AND JUSTI- 
FIES US IN DECLARING THAT THIS GOVERNMENT HAS NO RIGHT 
TO USE THE TAXING POWER EITHER DIRECTLY BY BOUNTY, 
OR INDIRECTLY BY A PROTECTIVE TARIFF. 

The idea of commercial freedom had its birthplace in the North, but it has 
spread over the States of the South and the West, and it will come back from 
these great sections and conquer the land in which it had its birth. [Applause.] 
Let us not stir anew the dying embers of civil strife. I DID NOT LIVE 
THROUGH THOSE DAYS. IT WAS NOT MY GOOD FORTUNE TO 
BE PERMITTED TO SHOW MY LOYALTY TO THE UNION OR MY 
DEVOTION TO A STATE. 



SENATOR SHERMAN ON THE ACT OF 1873. 

■■■^■■■■■■BWi^nBangBBBnat^w^iMH^B^WBB^iMii^MWBMBMaBMea—Bya— ■ n iii iii iBa—a—raMmmiBaMaei— at— a— a^ 

SPEECH 

Hon. John Sherman 

OF OHIO, 

IN THE seNHxe 
August 30, 1893. 



-^y-viy-^.- 



EXTRACTS FROM THE SPEECHES OF 

SENATORS STEWART an^ JONES 

OF NEVADA. 
IN THE \J, S, SENKTB 



Hr- 



SBNATOR WILLIAM M. STEWART, of NEVADA, salds 

We liave resources abnndanit to set the grold. Forty million peo- 
ple can £uri*isb all tbe money tliat is uecesrary. Tliey Trill set it. 
Wben g:old is invited to a country like tliis, vritli sucb. an industrious 
people as Tve liave, Tvitli our industry and rur resources, 1 say tbere 
i^ill be no difficulty about g;ettingr sufficient gold. 

Why, sir, everything we have got is measured by gold. Your greenbacks are 
measured by gold. But your contrivance is so uncertain that the middle man 
reaps all the reward, while the producer is robbed continuoutsly. If you are 
going to have gold in this country, you must make a demand for gold by using 
it. * * * In every country where gold has been treated unkindly, where the Gov- 
ernment has favored a depreciated currency, gold has left the country. Gold 
left France at the time she undertook this same experiment. Gold left England 
when she allowed irredeemable paper to be circulated, and she had to go back to 
the regular standard before she could get it back. Gold left Holland in the 
same way. * * * You have legislated gold " out of your country. Invite it 
back, and forty million people will get you all the gold you want. * * * You will 
have all the gold you need as a regulator, as a basis for your currency, and it 
will come very shortly. Then we shall have prosperity based upon a certainty. 
—February 20, 1874, Congressional Record, Page 1678. 

Tbe question never ivill be settled until you determine tbe simple 
question wbether tbe laboring: man is entitled to a g^old tlollar if be 
earns it, or -vrhetber you are groingr to cbeat bim. 'vritb sometbinur else. 



That is the upshot of the whole thing. The people will hold right on to that, 

and tiiey will come to the conclusion, "I am entitled to just as good money as my 
neighbor," and to that party tiiey will all Unally come until it will get to be a 
big party. It was a little party iu Ji^ngland once, but it grew wonderfully. It 
has been a little party in tins country occasionally, but under Silas Wright, Tom 
Benton, and Calhoun, and others, it grew to be the party of the country/ The 
Whig party had to adopt it and put it into their platform in order to get along 
at all. iCverybody had to say that the laboring man was entitled to a good dollar. 
That was fought over. They vrill fight it over again and the same party will 
win. There have been a great many battles fought against \gold, and gold has 
won every time. Gold never has compromised. You say you have got up a 
compromise bill on the question whether gold shall be respected. Gold has made 
the world respect it all the time. The English people once thought they could 
get along without gold for awhile, but they had to go back to it. June 12, 1874, 
Congressional Record, Page, 4909. 

Let everybody know what a dollar is worth. Then the man who goes West 
to buy pi-oduce will be under no necesssiry to insure himself against the huctua- 
tions of the currency. He can pay the full value of the wheat then without the 
fear that a change in the price of gold will break him down before he gets back 
to New York. The wheat will be measured by the same standard, gold— in Illin- 
ois as it is in Liverpool, and any man can figure it up. i5ut now it is a mys- 
tery; the whole subject of finance is a mystery; and w^hat do we see 
eveiy day? We see those who devote their attention to it making 
large fortunes out of this mystery. Let us do as all the people of tlie 
fvorld liave been doin^ from, tlie beginning^, measure our values by gold, 
adopt the standard that all can understand, and get rid of this mystery. — Feb- 
ruary 11, 1874, Congressional Record, Page 1302. 

I do not care liow mucli you discuss i+ or liow many resolutions 
you may pass; they do not make any difference; you must come to the 
same conclusion that all other people have — that gold is recogniaed 
as the universal standard of value. It is the measure that must be used. 
It is the measure by which your wealth must be tested; and whether it be pen- 
nies or millions macLers not, it is the measure that must test all wealth. 
The wealth of the United {States is tested by the same rule. It has been 
and always will be the touchstone of measurement, and when you depart from 
that and try t* figure up any other measure which the world does not recognize, 
you get into confusion. Attempting to reconcile them it is idle to talk about. 
It is idle to talk about compromising on any other measure of value; the world will 
not accept it. We have the experience of every nation that has tried it, and it 
has been tried in almost every civilized nation. * * * * Do not let us try 
to deceive the American people; do not let us try to make them believe by some 
hocus-pocus of legislation that we can give them something of real value, we 
can give them a measure of value that is better than the universal standard of 
mankind. Do not deceive them in that regard. Let them knOw the facts now. 
—June 11, 1874, Congressional Record, Page 4867. 

I believe that it would be highly injurious to this country to again inflate the 
currency. * * * i need not enlarge upon the evils of a depreciated currency. 
This country has felt them too severely to require that I should mention them. 
It matters not what kind of a depreciated currency you have, it necessarily en- 
tails many evils. — January 23, 1874, Congressional Record, Page 865. 

I say a depreciated currency is attended ~" with many evils. The middle-men 
provide against it. In shipping grain, as was illustrated, from Illinois to Liver- 
IK)ol, every person who handles that grain will insure himself against these fluc- 
tuations. He will charge a higher commission. If the grain is to remain in 
his possession step by step he will insure against, fluctuations, and every one 
between the producer and consumer will insure himself against them. It is not 
a fact with a fluctuating currency that the value of wheat in Illinois is the price 
in Liverpool, less the cost of transportation to Liverpool. When you have a de- 
preciated currency you have not only to take into account transportation, but 
you have to take into account the insurance that every man who handles the 
wheat will take against the change in price in gold constantly coming upon him. 
It gives speculators and middle-men a chance to cut both wsljb and eat up the 
consumer and the producer. * * * But suppose you adopt what the world 
adopts as the measure of value for your currency, then what will you have? Then 
you can have all the currenoy which you have got money to buy. You will have 
the world's currency. You can have all the money then that you have got the 
representatiYe of value for. You can have the inflation then on a sound baais. 

2 



* * * Sir. you want currency enough to do the business of the country, and 
when you adopt the measure of value that the world recognizes you will have 
sufficient money to do the business of the country with, the same as they do any- 
where else, because, if you have got crops to move and you have a necessity for 
money, the world v^ill come to your aid at once, but if you have a depreciated 
currency that drives all the rest out, that prevents your using gold, then you 
will have these same difficulties. * * * if you adopted tlie -aniversal meas- 
ure of value— g-old — as your "basis, then your circulation would be 
flexible, and it would be mucli harder to make a "corner" on the gold 
in this country, on the circulation of the country, Trhich -would dis- 
tribute itself according to the laws of ti*ade throughout the country. 
— January 23, 1874, Congressional Record, Page 866. 

We hesitate whether we will give the laboring man a dollar which has pur- 
chasing power enough to support him. We hesitate whether we will stop the 
speculation in gold in New York. We hesitate whether we will take out of the 
hands of the middle-men the capacity to eat up the wealth of the country. We 
hesitate whether the profits of thif* land shall all concentrate in the commercial 
centres, where money is the object of trade, where organizations are formed for 
the purpose of getting rich on your depreciated currency and robbing the pro- 
ducer. We hesitate whether we sha'll be honest and fair: the Senate hesitates, 
and the Senators appeal to the people in speeches and call upon them to throttle 
the banks, to throttle the monopoly, to bring down the rate of interest. This 
proposition is the very thing that throttles dishonesty, and it is the very thing 
we want.— February 20, 1874, Congressional Record, Page 1677. 



Speech of Senator Sherman- 
August 30th, 1893. 



MR. SHERMAN said: 

I wish now to call attention of the Senate to the coinage act of the United 
States, and especially to the act of 1873, which has been the subject of so much 
misrepresentation and falsehood in this debate. I propose, not on my own 
account, but for the benefit of the distinguished officers of the Government 
who participated in this legislation, to show in the most unequivocal manner, 
the deception and falsehood, largely the result of cowardice, that hag been ut- 
tered in respect to the act I refer to. 

When the coinage ratio was fixed by Alexander Hamilton of 15 ounces of 
silvg: as the equivalent of 1 ounce of gold, it was substantially equivalent to 
the market ratio, but the constant tendency of eilver to decline in relative value 
had been going on for years and continued in an almost imperceptible degree, 
so that when the French standard wa« fixed at 15^ to 1, the little gold then in 
the United States was exported, and silv«r alone wa« the aoin in circulation. 

a 



Mr. MILLS. About what time was the French standard fixed at 15y2? 

Mr. SHERMAN. It was in 1803, I understand. At that time and for many 
years, foreign silver coins were largely circulated as money in the United States, 
mostly in worn and depreciated coin worth less than its nominal value. This 
caused the silver dollar, then coined in small quantities, to be melted, as more 
valuable than the coin then in circulation. 

MR. JEFFERSON DISCONTmUED THE COINAGE 
OF SILVER. 

Up to that time I believe the whole amount of silver dollars was less than 
$2,000,000. I am quite sure of it. Mr. Jefferson, in 1806, discontinued the 
coinage of the silver dollar, and for thirty years not a dollar was issued. Our 
currency was either the paper of State banks, fractional coins, or depreciated 
foreign silver coins. A friend of mine here said he knew of a large payment 
being made for a farm in silver dollars during this period; but I soon satisfied 
him that that was a mistake. However, the Spanish milled dollar and the 
Mexican silver dollar still continued to be the legal standard of money in this 
country until 1873, some of it at least. 

Mr. COCKRELL. Up to 1857, the Senator will remember. 

Mr. SHERMAN. To 1857, but I think some of it was kept until 1873. 

Mr. COCKRELIv. It was full legal tender np to 1857. and being such was 
not reeoined. 

Mr. SHERMAN. So the only dollars then in circulation in this country were 
dollars of foreign manufacture. After the action in 1835. etc., they were be- 
ginning to be coined more or less, but almost entirely for the Chinese trade. 
They were exported there during and since our civil war. at the time when 
specie payments were suspended in all parts of our country except in California. 
Practically no gold coin was then in circulation. This continued until June 28, 
1834, when, in order to secure gold in circulation, the ratio was changed to 18 
of silver to 1 of gold. The object of this change was distinctly stated, espec- 
ially by Mr. Benton, who said: . • '', ' 

To enable the friends of gold to go to work at the right place to effect the 
recovery of that precious metal which their fathers once possessed; which the 
subjects of European kings now possess; which the citizens of the young repub- 
lics to the South all possess; which even the free negroes of San Domingo pos- 
sess; but which the yeomanry of this America have been deprived for more than 
twenty years, and will be deprived forever unless they discover the cause of 
the eril and apply the remedy to its root. 

THE ACT OF 1853. 

By the act of 1834, superadded to by the act of 1837, the ratio of 16 to 1 
instead of 15 to 1 was adopted. The result was that gold coins were largely 
introduced and circulated; but as 16 ounces of silver were worth more than 1 
ounoe of gold, the salver coins disappeared, except the depreciated silver coin ef 



other oountries, then a legal tender. To correct this eril, Congress February 
21, 1853, provided for the purchase of silrer bullion. That was the first time 
the Goremment had ever undertaken to buy bullion for coinage purposes, so 
far as I now remember. It provided for the purchase of silver bullion and the 
coinage of subsidiary silver coins at the ratio of less than 15 to 1. 

As the value of these coins was less than gold at the coinage ratio, they 
were limited as a legal tender to $5 in any one payment. They were, in fact, 
a subsidiary coin made on Government account, and, from their convenience 
and necessity, maintained in circulation. They are the very coins now in use, 
revived and re-enacted by the resumption act of 1875. 

It was not the intention of the framers of this law to demonetize silver, be- 
cause they were openly avowed bimetallists, but it limited coinage to silver 
bought by the Government. They saw in this expedient a way in which silver 
could be more generally utilized than in any other. Mr. R. M. T. Hunter, an 
avowed bimetallist, in a report to theUnited States Senate, said: 

The mischief would be great indeed if all the world were to adopt but one 
of the precious metals as the standard of value. To adopt gold alone would 
diminish the specie currency more than one-half; and the reduction the other 
way, should silver be taken as the only standard, would be large enough to prove 
highly disastrous to the human race. 

He evidently did not consider the purchase of silver bullion at its coinage 
value by the Government, instead of the free coinage of silver, as monomet- 
allism. 

WAS NOT SILVER DEMONETIZED IN 1835 OR 1853? 

After the passage of the act of February 21, 1853, gold in great quantities, 
the product of the mines in California, was freely coined at the ratio of 16 to 
1, and was in general circulation. If, then, the purchase of silver instead of 
the free coinage of silver is the demonetization of sliver, it was demonetized 
practically in 1835, and certainly in 1853, when the purchase of silver and its 
use as money increased enormously. In 1852 the coinage of silver was less than 
$1,000,000. In the next year the coinage of silver rose to over $9,000,000, and 
reached the aggregate of nearly $50,000,000 before the beginning of the Civil 
War. Then, as now, the purchase of silver bullion led to a greater coinage than 
free coinage. 

This was the condition of our coinage until the war, like all other great 
wars in history, drove all coins into hoarding or exportation, and paper j)rom- 
ises, great and small, from 5 cents to $1,000, supplanted both silver and 
gold. 

Now we come to the act of 1873, which dropped from the coin the silver dol- 
lar. THE CHARGE HAS BEEN MADE OVER AND OVER AGAIN THAT 
THIS WAS SURREPTITIOUSLY DONE; THAT IT WAS DONE UNDER 
COVER IN SOME WAY. THAT HAS BEEN CLEARLY DISPROVED BY 
THE EXHIBITION OF THE PUBLIC RECORDS, AND IT SEEMS TO 
MB THAT EVERY INTELLIGENT MAN OUGHT NOW TO HAVB 



SBEN THAT FACT. But there has been a repetition of that imputation. It 
was an imputation against the whole mass of the Forty-second Congress, and 
yet in conyentione no doubt of honest and good people — I do not in the least 
disparage them— they denounced the act of 1873 as a fraud and as a crime; 
yes, it was the crime of 1873. 

THE INNER HISTORY OF THE ACT OF 73. 

My name is not mentioned in these accusations, but I was chairman of 
the Committee on Finance, and had charge of the bill here; and I prefer to 
show exactly what was done. BUT THE GREAT ACT OF 1873 IS THUS 
STAINED BY THE IMPUTATION OF OUR OWN COUNTRYMEN, AND 
I INTEND TO PRODUCE THE PUBLIC RECORDS AND MAKE THIS 
MATTER PLAIN AND CLEAR, THAT THE WHOLE HISTORY OF 
THAT LAW FROM BEGINNING TO END WAS HONORABLE TO 
CONGRESS, FREE FROM CORRUPTION, OPEN AND INGENUOUS, 
FRANK AND FULL. I WILL PLACE IT UPON THE PUBLIC REC- 
ORDS, AND HEREAFTER WHEN ANY MAN MAKES SUCH AN IM- 
PUTATION I WILL SIIVIPLY SAY THAT IT IS A FALSEHOOD, AND I 
BRAND IT SO NOW IN ADVANCE. 

What is the history of that bill? I have here the original bill. It was a bill 
framed in the Treasury Department. It did not come into Congress in the 
ordinary way, but it was framed in the Treasury Department by a distinguish- 
ed body of experts, every one of whose names is now borne with honor wher- 
ever it is mentioned. Most of them are dead, but some of them are living. 
Mr. Pollock, long a Director of the Mint; Mr. Secretary Bnutwell, who, as I 
shall show you, claims to be the author of the bill, and pi'operly so, because 
he was at the head of the department; Mr. John Jay Knox, who held the office 
of Deputy Comptroller of the Currency; Mr. LInderman, who was Director 
of the Mint; Mr. Patterson, who was Superintendent of the Mint at Philadel- 
phia, and a whole host of other experts, framed that bill after a most elaborate 
correspondence, which is contained here in the official documents communicated 
to Congress at the time. 

COPIES OF THE BILL WERE WIDELY CIRCULATED. 

So the whole matter was open. They circulated thousands of copies of the 
bill to everybody who desired to read it, or could be prevailed upon to read it, 
in order to get the sense and judgment of the experts of our country in respect 
to the coinage, and those answers are here printed in a public document com- 
municated to Congress upon the call of the House of Representative before a 
single step was taken on the bill. 

Mr. ALDRICH: That was in 1870? 

Mr. SHERMAN: Yes; I will give the dates in a moment. These were men 
of untarnished character. It was a scientific bill, a bill that we members of 
Congress do not care much about handling, because if we are lawyers we are 

6 



not metallists; if we are business men we do not know anything about the mys- 
tery of coinage, one of the most subtle and careful sciences. These were men 
who would rather pore over a table of logarithms or study a problem in geome- 
try or do something of that kind than do anything to tarnish their name and 
their fame. They prepared this bill at the request of the Secretary of the 
Treasury, and it was communicated to Congress. Here is the first communi- 
cation conveying the bill to me as chairman of the Committee on Finance to be 
submitted to the Senate: 

Treasury Department, April 25, 1870. 
Sir: I have the honor to transmit herewith a bill revising the laws relative 
to the Mint, assay offices, and coinage of the United States, and accompanying 
report. The bill has been prepared under the supervision of John Jay Knox, Dep- 
uty Comptroller of the Currency, and its passage is recommended in the form 
presented. It includes, in a condensed form, all the important legislation upon 
the coinage, not now obsolete, since the first mint was established, in 1792; 
and the report gives a concise statement of the various amendments proposed to 
existing laws and the necessity for the change recommended. There has been no 
revision of the laws pertaining to the Mint and coinage since 1837, and it is be- 
lieved that the passage of the inclosed bill will conduce greatly to the efficiency 
and economy of this important branch of the Government service. 
I am, very respectfully, your obedient servant, 

GEO. S. BOUTWELL, 
Secretary of the Treasury. 
HON. JOHN SHERMAN, 
Chaarman Finance Committee, United Statea Senate. 

THE ORIGINAL BILL IN DETAIL. 

The bill contains seventy-one sections. Sections 15 and 18 of the bill are 
the only ones to which this imputation has ever been made. I have here sections 
15 and IS as originally introduced by the Secretary of the Treasury and sent to 
to the Committee on Finance. Here are the original sections: 

Sec. 15. And be it further enacted. That of the silver coin, the weight of 
the half-dollar, or piece of 50 cents, shall be 192 grains; and that of the quarter- 
dollar and dime shall be, respectively, one-half and one-fifth of the weight of 
said half-dollar. That the silver coin issued in conformity with the above sec- 
tion shall be a legal tender in any one payment of debts for all sums less than $1. 

This is a literal copy, word for word, from the act of 1853, except that it 
drops the five-cent piece, I believe it is. 

Mr. MILLS. The act of 1873, the Senator means? 

Mr. SHERMAN. No; I say the bill that was sent to us re-enacts the law 
of 1853, and is an exact copy of it; but aa the law of 1853 applied only to the 
fractional coins, in this draft they added to the four or five sections fixing the 
gold and silver and other coins the following section: 

Sec. 18. And be it further enacted. That no coins, either gold, silver or 
minor coinage, shall hereafter be issued from the Mint other than those of 
the denominations, standards and weights herein set forth. 

UNDER THAT SECTION THE DOLLAR WAS DROPPED FROM 



THE COINAGE, A DOLLAR THAT HAD SCARCELY BEEN USED 
FOR NEARLY SEVENTY YEARS EXCEir^T TO PUT SILVER IN FORM 
FOR EXPORTATION. But I will allude to that more hereafter. 

BTJT ONE CHANGE MADE IN THE BILL. 

These sections in the three years that bill was pending in Congress were 
changed either iu the House or Senate in only one or two unimportant particulars. 
The House of Representatives thought it was necessary to provide a dollar. They 
knew that the dollar was dropped out, as everybody else must have known, 
because the gentlemen who framed the original bill give the history of the 
act, and, as I shall show you in a moment, this matter was pointed out by 
them. It was discussed and the reasons given, and I will furnish in a moment 
the extract. 

I have here the form which these two sections assumed when the bill was 
finally passed. Here is the difference: 

That the silver coins of the United States shall be a trade dollar. 

Instead of a trade dollar, and omitting the dollar of 412% grains— nobody 
proposed such a dollar— the House of Representatives put on a dollar of 384 
grains, and that was to be, like the half-dollars, a subsidiary coin. It was to be 
of the exact weight of two half dollars. That was put on by the House of Rep- 
resentatives, because they wished to keep the form of a dollar, and it contained 
384 grains. 

THE DOLLAR REDUCED TO A SUBSIDIARY COIN. 

Mr. MILLS. Was it a full or a limited legal tender? 

Mr. SHERMAN. A limited tender to $5. There, if at all, the dollar of 
412% grains being out of use, the dollar was reduced down to a subsidiary 
coin, just as our smaller coins had in 1853 been reduced from their full legal 
tender quality. 

Mr. FRYE. The Senator, I think, has not stated when the Boutwell bill 
was first introduced in Congress. 

Mr. SHERMAN. I gave the date, 

Mr. FRYE. In 1870? 

Mr. SHERMAN. Yes, in 1870. 

Mr. FRYE. Then it is the action C»f 1870 of which the Senator is now 
speaking? 

Mr. SHERMAN. This is the bill as it was passed into a law. 

Mr. CULLOM. That was in 1873. 

Mr. SHERMAN. IN 1873. IT WAS PENDING DURING THREE 
DIFFERENT SESSIONS OF CONGRESS. The dollar of 384 grains wa« in- 
serted when it came to ua from the House. The bill of 18T0 hstyiog paased the 



Senate, failed in the House of RepreeemtatiTe* for want of time. In the follow- 
ing Congress the same bill was taken up in the House, there considered, passed, 
and sent to the Senate. THE SENATE THEN, UPON THE DEMAND OP 
THE PEOPLE OF THE PACIFIC COAST AND THE PETITION OF 
THE STATE OF CALIFORNIA, WHICH I HAD READ HERE IN 
OPEN SENATE SOME YEARS AGO, INSERTED, INSTEAD OF 
THE 3S4-GRAIN DOLLAR, THE TRADE DOLLAR CONTAINING 420 
GRAINS. The Senate also dropped out the word "grains," which had been in- 
troduced in the House, and in that form it finally passed. Throughout all 
these change* this provision remained: 

Section 17. That no coins either of gold, silver, or minor coinage, shall here- 
after be issued from the mint other tlian those of the denominations, standards, 
and weights herein set forth. 

THE STANDARD DOLLAR HEVER IN EVIDEHC^. 

It is thus »hown that from the first introduction of the bill, April 25, 1870, 
until its final passage into a law, February, 1873, the silver dollar of 412% 
grains was dropped from the silver coins, and by section 17 was prohibited. 

In the report accompanying the introduction of the bill, under date of 
April 25, 1870, Mr. John J. Knox, Comptroller of the Currency, gives the his- 
tory of the silver dollar and the reasons for its discontinuance: 

The dollar unit, as money of account, was established by the act of Con- 
gress April 2, 1792, and the same act provides for the coinage of a silver dol- 
lar, "of the value of a Spanish milled or pillar dollar, as the same is now cur- 
rent." The silver dollar was first coined in 1794, weighing 416 grains, of which 
371% grains were pure silver, the fineness being 892.4. The act of January 18, 
1837. reduces the standard weight to 412% grains, but increases the fineness 
to ,900, the quantity of pure silver remaining 371% grains as before, and at 
these rates it is still coined in limited amount. 

He then says: 

The coinage of the silver-dollar piece the history of which is here given, is 
discontinued in the proposed bill. It is by law the dollar unit, and, assuming 
the value of gold to be fifteen and one-half times that of silver, being about 
the mean ratio for the past six years, is worth in gold a premium of about 3 
per cent, (its value being 103.12) and intrinsically more than 7 per cent, pre- 
mium in our other silver ooin, its value thus being 107.42. The present laws 
consequently authorize both a gold-dollar unit and a silver-dollar unit, dif- 
fering from each other in intrinsic value. The present gold-dollar piece is 
made the dollar unit in the proposed bill, and the silver-dollar piece is dis- 
continued. If, however, such a coin is authorized, it should be issued only as a 
commercial dollar, not as a standard unit of account, and of the exact value 
of the Mexican dollar, which is the favorite for circulation in China and Ja- 
pan and other oriental countries. 

Note. — "Assuming the value of gold to be fifteen and one-half times that 
of silver, the French 5-franc piece is w«rth about 96% cents (96.4784); the 
standard Mexican dollar 104.90, our silver-dollar piece 103.12, and two of our 
half-dollar pieeea 96 oenta." 



STATEMENT OF EXPEET METALLISTS. 

I shall, without reading, quote from public records — for on this subject I 
shall not put one word in my speech except what I quote from public records— 
the statement made in this correspondence by Mr. Robert Patterson, of Phila- 
delphia, who is confessedly one of the ablest scientists and best metallists in 
the United States, and probably in the world. He has a great reputation. He 
discussed the proposition for and against. Here is what he says: 

(Ex. Doc. H. R. No. 307, second session Forty-first Congress). 

Silver dollar, half dime, and three-cent piece discontinued. Coins less 
than a dime of copper- nickel legal tender. One-cent piece of one gram in 
weight. 

The silver dollar, half dime, and three-cent piece are dispensed with by 
this amendment. Gold becomes the standard money, of which the gold dol- 
lar is the unit. Silver is subsidiary, embracing coins from the dime to half 
dollar. Coins less than a dime are of copper-nickel. The legal tender is 
limited to the necessities of the case, not more than a dollar for such silver, 
or 15 cents for the nickels. 

■ ** *** *** ***** ** 

The difference is called profit and so credited to the silver profit and loss 
account. But if the silver dollar is abolished (as seems to be agreed on, and 
properly so), a new normal or standard must be agreed on to estimate profit. 

These were statements communicated to us with the bill by Dr. H. R. Lin- 
derman, formerly Director of the Mint, whose character and standing is known 
by all Senators. Dr. Linderman says: 

Section 11 reduces the weight of the silver dollar from 412% to 384 grains. 
I can see no good reason for the proposed reduction in the weight of this 
coin. It would be better, in my opinion, to discontinue its issue altogether. 

The gold dollar is really the legal unit and measure of value. Having a 
higher value as bullion than its nominal value, the silver dollar long ago ceased 
to be a coin of circulation, and, being of no practical use whatever, its issue 
should be discontinued. 

OPimOK OF J. ROSS SNOWDEN. 

J. Ross Snowden, formerly Superintendent of the Mint at Philadelphia, 
says: I 

I see it is proposed to demonetize the silver dollar. ITiis I think inadvisable. 
Silver coins below the dollar are now not money in a proper sense, but only 
tokens. I do not like the idea of reducing the silver dollar to that level. It is 
quite true that the silver dollar, being more valuable than two half dollars or four 
quarter dollars, will not be used as a circulating medium, but only for cabinets, 
and perhaps to supply some occasional or local demand; yet I think there is no 
necessity for so considerable a piece as the dollar to be struck from the metal 
which is only worth 94 cents. When we speak of dollars let it be known that 
we epeak of dollars not demonetized and reduced below their intrinsic value, and 
thus avoid the introduction of contradictory and loose ideas of the standards 
of value. 

Hon. William E. Chandler, formerly Assistant Secretary of the Treasury, 
Mijs: 

10 



The neoessdty of iueh a rcTition has been apparent to ereryone connectad 
of late years with the Treasury Department. The work has been admirably 

performed by you. You have happily secured and availed yourself of the sug- 
gestions of others, while impressing upon codification that unity and complete- 
ness which can only result from the operations of one thoroughly informed mind. 
If the law is enacted it will result most beneficially. 

The abolition of the coinage charge, and the adoption of the metrical sys- 
tem, with a Yiew to an international system of coinage, are so clearly apparent 
that I cannot believe that Congress will delay action much longer. 

I am pleased with your report as a compendious statement of useful in- 
formation connected with the coinage system. The table on page 26, show- 
ing the weight, fineness, and tolerance of all the United States coins, together 
with the amount in which such coins are legal tender, is especially valuable. I 
believe the very best results will follow from your work. 

THE BILL REPORTED T© THE SENATE. 

Mr. President, the Finance Committee carefully examined that bill. We 
were not in any hurry about it. It was sent to us in April, 1870. In Decem- 
ber. 1870, the Committee on Finance, after a careful examination, after having 
the bill printed and sent by the order of the Senate to everyone who desired 
to read it or look over it, reported it unanimously. 

That committee was composed of Messrs. Sherman, Williams, who waa 
from Oregon, Cattell, Morrill, Warner, Fenton and Bayard. 

The bill was reported to the Senate December 19, 1870, after lying in our 
committee room for eight months. The nature of the bill I have already de- 
scribed. The dollar was dropped from the coinage in the bill framed in the 
Treasury Department. It was then an unknown coin. Although I was quite 
active in business which brought under my eye different forms of money, I 
do not remember at that time ever to have seen a silver dollar. It waa an un- 
known quantity. Probably if it had been mentioned to the committee and dis- 
cussed it would have been thought, as a matter of course, scarcely worthy of 
inquiry. If it was known at all, it was known as a coin for the foreign mar- 
ket. 

NO ONE PROPOSED TO REISSUE IT. THE PACIFIC GOASO. 
HAD SIX INTELLIGENT. ABLE, AND COMPETENT SENATORS ON 
THIS FLOOR. REPRESENTING A POPULATION THEN OF NOT 
MORE THAN A MILLION. IF THAT MUCH. THEY WOULD HAVE 
CAREFULLY LOOKED OUT FOR THE INTERESTS OF SILVER, IF 
THE BILL AFFECTED THEM INJURIOUSLY. BUT THE SILVER 
DOLLAR AT THAT TIME WAS WORTH MORE THAN THE GOLD 
DOLLAR. CALIFORNIA AND NEVADA ^HBRE ON THE GOLD STAND- 
ARD. 

As I oaid, the bill was printed over and over again, finally reported, and 
brought before the Senate. It was debated here for three days, and I hav« 
the voluminous record upon the •ubject. THE SENATOR FROM NEVADA 
(MR. STTEWART) TOOK A LBiADING FART IN THAT DEBATE, AND 

U 



EVERY SENATOR FROM THE PAOIFI© COAST SPOKE UPON THH 
MEASURE. Representing the committee, I presented the questions as they 
occurred from time to time, until finally we differed quite seriously upon the 
question of a charge for the coinage of gold. The only yea-and-nay rote in the 
Senate on the passage of that bill, after two days debate, occurred on the 10th 
day of January, 1871, and I shall read the Tote: 

SENATOR STEWART VOTED FOR THE BILL. 

In favor of the bill, Messrs. Bayard, Boreman, Browniow, Caeserly— 
From the Pacific slope — 

Cole— 

Also from California — 
Conkling, Corbett— 
From Oregon- 
Davis, Gilbert, Hamlin, Harlan, Jewett, Johnston, Kellogg, McCreary, Mor- 
ton, Nye— 

From Nevada- 
Patterson, Pomeroy, Pool, Ramsey, Rice, Saulsbury, Spencer, STEWART, 
Stockton, Sumner, Thurman, Tipton, Trumbull, Vickers, Warner, Willey, Wil- 
liams, Wilson and Yates — 36. 

Everyone of the six members from the Pacific coast voted for the bill after 
full debate. 

I know that the Senator from Nevada (Mr. Stewart) questioned somewhat 
the accuracy of the statement of my neighbor here, the Senator from Massa- 
chusetts (Mr. Hoar), in regard to his vote; BUT HIS VOTE IS ON REC- 
ORD. IF THE SENATOR DESIRES TO LOOK AT IT, HERE IT IS (ex- 
hibiting paper). Strange to say, that against this bill were: 

Messrs. Abbott, Ames, Anthony, Buckingham, Carpenter, Chandler, Fen- 
ton, Hamilton, of Texas; Harris, Howell, Morrill, of Vermont; Pratt, Scott, 
and Sherman— 14. 

SENATOR SHERMAN VOTED "NO/' 

so THAT ON THE ONLY VOTE WHICH WAS EVER TAKEN 
UPON THIS FLOOR THE SENATOR FROM NEVADA (MR. STEWART) 
VOTED FOR IT, AND I, THE "DEVIL FISH," (Laughter) VOTED 
AGAINST IT. It was not on account of demonetizing the silver dollar. I did 
not do it because of that, but I did it because gold wae then only coined for the 
benefit of private depositors; we were not using gold except for limited purposes. 
Gold was the standard in California, and we thought they ought to continue 
to pay the old and reasonable rate for coinage of one-fifth of 1 cent to the 
dollar. Because we were beaten upon that proposition, the majority of the 
Oommittee ©n Finance voted against the bill which was r^wrted, not because 

tM 



it left out the silver dollar, but because it struck out the charge for mintage 
of gold; and every member from the Pacific coast voted for it. 

jMr. President, the continuation of the history of that bill through the House 
of Representatives and through all of its stages until it finally passed into tht 
hands of the Committee of Conference is so clearly and distinctly stated by 
the report of Mr. Knox, which has already been published, that I shall ask to 
have it embodied in my remarks, so as to relieve me from the necessity of 
reading it. Every statement contained in this report I have had verified by the 
public records. It is, therefore, a mere quotation of the proceedings of Con« 
gress: 

COMPTROLLER KNOX^S REVIEW OF THE BILL. 

On April 25, 1870, the Secretary of the Treasury transmitted the following 
letter to Hon. John Sherman, chairman of the Finance Committee of the Sen- 
ate: 

Treasury Department, April 25, 1870. 
Sir: I have the honor to transmit herewith a bill revising the laws rela- 
tive to the mint, assay ofiices and coinage of the United States, and accom- 
panying report. The bill has been prepared under the supervision of Joha 
Jay Knox, Deputy Comptroller of the Currency, and its passage is recom- 
mended in the form presented. It includes in a condensed form all the im- 
portant legislation upon the coinage, not now obsolete, since the first mint 
was established in 1792; and the report gives a concise statement of the va- 
rious amendments proposed to existing laws, and the necessity for the change 
recommended. There has been no revision of the laws pertaining to the mint 
and coinage since 1837, and it is believed that the passage of the inclosed bill 
will conduce greatly to the efficiency and economy of this important branch, of 
the Government service. 

I am, very respectfully, your obedient servant, 

GBO. S. BOUTWELL, Secretary of the Treasury. 

The report and the bill were referred, on April 28, 1870, to the Finance 
Committee of the Senate, and subsequently, on Alay 2, 1870, 500 additional copiea 
were ordered to be printed for the use of the Treasury Department. The re- 
port says: 

"The method adopted in the preparation of the bill was first to arrange in 
as concise a form as possible the laws now in existence upon these subjects, 
with such additional sections and suggestions as seemed valuable. Having 
accomplished this, the bill, as thus prepared, was printed upon paper with 
wide margin, and in this form transmitted to the different mints and assay 
offices, to the First Comptroller, the Treasurer, the Solicitor, the First Audi- 
tor, and to such other gentlemen as are known to be intelligent upon metal- 
lurgical and numismatical subjects, with the request that the printed bill 
should be returned with such notes and suggestions as experience and edu- 
cation should dictate. In this way the views of more than thii'ty gentlemea 
who are conversant with the manipulation of metals, the manufacture of 
coinage, the execution of the present laws relative thereto, the method of 
keeping accounts, and of making returns to the Department, have been de- 
tained with but little expense to the Department and little inconvenience to 
corresi^udents. Having received these suggestions, the present bill has 

1^ 



been framed, and it is belieyed to comprise within the compass of eight or 
ten pages of the Revised Statutes erery important provision contained in 
more than sixty different enactments upon the mint, assay offices, and coin- 
age of the United States, which are the result of nearly eighty years of legis- 
lation upon these subjects." 

The amendments proposed by the bDI were as follows: 

PROPOSED AMENDMENTS. 

"The new features of the bill now submitted are, chiefly: The establish- 
ment of a Mint Bureau of the Treasury Department, which shall also have 
charge of the collection of statistics relative to the precious metals; the 
consolidation of the office of Superintendent with that of the Treasurer, 
thus abolishing the latter office, and disconnecting the Mint entirely from 
the office of Assistant Treasurer; the rex>eal of the coinage charge, and au- 
thorizing the exchange of unparted for refined bars; a reduction . in the 
amount of wastage, and the tolerance (deviation in weight and fineness) in 
the manufacture of coin; requiring the token coinage to be of one material 
of uniform value, and to be redeemed under proper regulations when issued 
in excess, and the expense, of its manufacture to be paid from specific ap- 
propriations, and not from the gain arising in its manufacture, as hereto- 
fore; an entire change in the manner of issuing the silver (subsidiary) 
coinage; discontinuing the coinage of the silver dollar; limiting the amount 
of silver to be used as alloy, so as to make the gold coinage of uniform 
color; the destruction of the dies, not in use, annually; requiring vouchers 
to pass between the different officers of the Mint in all transfers of bullion 
or coin; requiring increased bonds from officers of the Mint, and author- 
izing each officer to nominate his subordinate before appointment; and also 
making it an offense to increase or diminish the weights used in the Mint." 

The report of Mr. Knox called special attention to the discontinuance of 
the silver dollar as a standard, as may be eeen from the following paragraph 
on page 11: 

SILVER DOLLAR— ITS DISCONTINUANCE AS A 
STANDARD. 

"The coinage of the «ilver-dollai piece, the history of which is here given, is. 
discontinued in the proposed bill. It is by law the dollar unit, and assum- 
ing the value of gold to be fifteen and one-half times that of silver, being 
about the mean ratio for the past six years, is worth in gold a premium of 
about 3 per cent, (its value being 103.12), and instrinsically more than 7 per 
cent, premium in our other silver coins, its value thus being 107.42. The 
present laws consequently authorize both a gold-dollar unit, rnd a silver-dol- 
lar unit, differing from each other iu intrinsic value. The present gold-dol- 
lar piece is made the dollar unit in the proposed bill, and the silver-dol- 
lar piece is discontinued. If, however, such a coin is authorized, it should 
be issued only as a commercial dollar, not as a standard unit of account, and 
of the exact value of the Mexican dollar, which is the favorite for circula- 
tion in China and Japan and other Oriental countries." 

The appendix to the report contained a copy of the English coinage act of 
1870, and four tables, giving (1) the existing coinage, including the silver dollar; 
(2) the proposed coinage in which the silver dollar was omitted; (3) a metric 
system of coinage suggesting the issue of a subsidiary silver coinage consist- 
ing of two half-dollars constituting in weight aad fineness an exact equiva- 
lent to the French five-franc piece, and a quarter-dollar and dime with propor- 



tionate weight and fineness, which proposition was finally adopted; (4) a table 
giying a comparison of coinage existing and proposed. A note at the foot 
of this table states that the silver dollar, half-dime, and 3-cent piece are 
omitted in the proposed bill. Subsequently, on June 25, 1870, the Secretary 
of the Treasury transmitted to the House of Representatives a letter of the 
then Deputy Comptroller of the Currency, together with copies of the cor- 
respondence of the Department with the officers of the different mints, assay 
offices, and other experts in reference to the bill and report previously sub- 
mitted. 

The bill in its original form, which was transmitted to the correspondents 
throughout the country for consideration and comment, contained the follow- 
ing section, as appears from the manuscript copy at the Treasury Depart- 
ment: 

"Sec. 15. And be it further enacted, That of the silver coins (the weight of 
the dollar shall be 384 grains, now 412% grains) the weight of the half-dollar 
or piece of 50 cents shall be 192 grains; and that the quarter-dollar and dime 
(and half-dime) shall be, respectively, one-half and one-fifth (and one-tenth) 
of the weight of said half-dollar. That the silver coin issued in conformity 
with the above sections shall be a legal-tender in any one payment of debts 
for all sums (not exceeding $5, except duties on imports) less than $1." 

If the words inclosed in (brackets) of the section as here given are ex- 
cluded and the words in italics included, the section will conform precisely 
to the section which was transmitted to Congress and which passed the Senate 
on January 9, 1871. 

The dollar of 384 grains was proposed in the rough revision of the bill for 
the purpose of obtaining an expression of opinion in reference to the proposed 
omission of the dollar piece and the words "except duties on imports" 
inserted for the reason that a regulation or usage at the Custom House in 
New York limits the payment of silver coins to the fractional parts of a 
dollar, except when the payment to be made is $5 or less. Several gentlemen in 
their criticisms upon the rough revision of the bill referred to this section. 

CHITICISMS OF THE BILL. 

Hon. James Pollock, the Director of the Mint at Philadelphia, said: 

"Sec. 11. The reduction of the weight of the whole dollar is approved, and 
waiB recommended in my annual report of 1861." (Page 10.) 

Mr. Robert Patterson, of Philadelphia, sent to Mr. Knox some notes on 
the bill suggesting amendments. He called attention to one of these in the 
following words: 

"The silver dollar, half-dime and three-cent piece are dispensed with by 
this amendment. Gold becomes the standard money, of which the gold dol- 
lar is the unit. Silver is subsidiary, embracing coins from the dime to half- 
dollar; coins less than the dime are of copper-nickel. The legal tender is limited 
to necessities of the case; not more than a dollar for such silver or 15 cents 
for the nickels." 

Mr. Franklin Peale, formerly melter and refiner and chief coiuer of the Mint 
at Philadelphia, recommended the discontinujiDce of the three and one dollar gold 
pieces, and supplying the place of the latter with a proper silver coin to be used 
as change. Dr. H. R. Linderman, the present Director of the Mint, said: 

"Section 11 reouces the weight of the silver dollar from 412% to 384 grains. 
I can see no good reason for the proposed reduction in the weight of this coin. 
It would be better, in my opinion, to discontinue its issue altogether. The gold 
dollar is really the legal unit and measure of value. Having a higher value as 
bullion than its nominal value, the silver dollar long ago ceased to be a coin of cir- 

16 



caiatlon: and being of no practical ase whateTer its issue should be discoatiaued." 
Mr. James Ross Snowden, formerly Director of the Mint, said: 
[see quotation above-] 

Mr. Greorge F. Dunning, formerly superintendent of the United States assay 
office in New York, proposed that the law in regard to the silver coinage should 
be in the following language: 

"Sec. 11. And be it further enacted, That the silver coins of the United States 
shall be a dollar, a half-dollar, a quarter- dollar, a dime or tenth of a dollar, and a 
half -dime or twentieth of a dollar; and the stssdard weight of the silver coins 
shall be in the proportion of 384 grains to the dollar, and these coins shall be a 
legal-tender in all payments not exceeding $5." 

The officers of the San Francisco branch mint made the following sugges- 
tions: f 

''Section 11: Would not the proposed change in the weight of the silver dol- 
lar disturb the relative value of all our coinage, affect our commercial con- 
ventions, and possibly impair the validity of contracts running through a 
long period? Might not the dollar be retained as a measure of value, but the 
coinage of the piece for circulation be discontinued?" 

Mr. B. B. Elliott, of the Treasury Department, gave a complete history of 
the silver dollar, and suggested the issue of a commercial dollar of nine- 
tenths fineness, and containing of pure silver just 35 grams, in place of the 
then existing silver dollar of 412% grains, the proposed silver dollar being 
almost the exact equivalent of the silver contained in the older Spanish- 
Mexican pillared dollar established in 1704 by proclamation of Queen Anne as 
a legal tender of payment and accepted as par of exchange for the British 
colonies of North America at the rate of 54d. sterling to the dollar, or 4 
and four-ninths dollars to the pound sterling. 

B^ORTEB FBOH THE FINAMCS COMMITTEE. 

On December 19, 1870. the bill was reported from the Finance Committee 
of the Senate and printed with amendments. 

On January 9, 1871, in accordance with previous notice, the bill came be- 
fore the Senate and was discussed during that day and the following day by 
Senators Sherman. Sumner, Bayard, Stewart, of Nevada. Williams, Casserly, 
Morrill, and others, and passed the Senate on the 10th by a vote of 36 yeas 
to 14 nays. 

On January 13, 1871. on motion of Hon. William D. Kelley, the Senate bill 
was ordered to be printed. On February 25, 1871, Mr. Kelley, the chairman 
of the Ck>mmittee on Coinage, reported the bill back, with an amendment in 
the nature of a substitute, when it was again printed and recommitted. Mr. 
Kelley again, on March 9, 1871, introduced the bill in the Forty-second Con- 
gress, when it was ordered to be printed, and referred to the Committee on 
Coinage, when appointed. 

On January 9, 1872, the bill was reported by Mr. Kelley, chairman of the 
Coinage Committee, with the recommendation that it pass. The bill was 
reaxi and discussed at length by Messrs. Kelley, Potter, Garfield, Maynard, 
Dawes. Holman and others. Mr. Kelley, in the opening speech, said: 

"The Senate took up the bill and acted upon it during the last Congrese 
aad sent it to the House; it was referred to the Committee on Coinage, 
Weight* an.d Meaiures. and received ae careful attention as I have ever known 
a committee to beitow ob any measure. 

• • « « «i • « 

"We proceeded witli great deliberation to go OTer the bill, not only tectioiiL 



hy sectioD, but line bj line, and word by word; the bill has not received the 
same elaborate consideration from the Oommittee on Coinage of thia House, 
but the attention of each member was brought to it at the earliest day of this 
session; each member procured a copy of the bill, and there has been a thorough 
examination of the bill again."— Congressional Globe, volume 100, page 322. 

Mr. Kelley on the same day also said: 

"There are one or two things in this bill, I will say to the gentleman from 
New York, with his permission, which I personally would like to modify: that 
is to say, I would like to follow the example of England and make a wide differ- 
ence between our silver and gold coinage. * * » 

"I would have liked to have made the gold dollar uniform with the French 
system of weights, taking the gram as a unit." (Page 323, volume 100.) 

On January 10, 1872, the bill after considerable discussion was again recom- 
mitted, and on February 9, 1872, it was again reported from the Coinage Com- 
mittee by Hon. Samuel Hooper, printed and recommitted, and on February 13, 
1872, reported back by Mr. Hooper with amendments, printed, and made the 
special order for March 12, 1872, until disposed of. 

On April 9, 1872, the bill came up in the House for consideration. Mr. 
Hooper, in a carefully prepared speech of ten columns, explained the provieions 
of each section of the bill. In this speech (page 2306, volume 102 of the Congres- 
sional Globe) he says: 

"Section 16 re-enacts the provisions of the existing laws defining the silver 
coins and their weights, respectively, except in relation to the silver dollar, which 
is reduced in weight from 412% to 384 grains, thus making it a subsidiary coin 
in harmony with the silver coins of less denomination to secure its concurrent 
circulation with them. The silver dollar of 412% grains, by reason of its bullion 
or intrinsic value being greater than its nominal value, long since ceased to be 
a coin of circulation, and is melted by manufacturers of silverware. It does 
not circulate now in commercial transactions with any country, and the conven- 
ience of these manufacturers in this respect can better be met by supplying small 
stamped bars of the same standard, avoiding the useless expense of coining the 
dollar for that purpose." 

MR. STOUGHTON OM THE SILVER DOLLAR. 

Mr. Stoughton, of the Coinage Committee, also made a speech of seven col- 
umns, in which he says: 

"The silver coins provided for are the dollar, 384 grains troy, the half-dollar, 
quarter-dollar and dime, of the value and weight of one-half, one-quarter and 
one-tenth of the dollar, respectively; and they are made a legal tender for all 
sums not exceeding $5 at any one payment. The silver dollar, as now issued, 
is worth for bullion 3^4 cents more than the gold dollar, and 7% cents more 
than two half-dollars; having a greater intrinsic and nominal value, it is certain 
to be withdrawn from circulation whenever we return to specie payment, and to 
be used for only manufacture and exportation as bullion." 

The latter in commentini: upon the bill says: 

"Mr. Speaker, this is a bill ©f importance. When it was before the 
House in the early part of this session I took some objections to it which I am 
inclined now to think, in view of all the circumstances, were not entirely well 
founded, but after further reflection I am stOl convinced that it is a measure 
which it is hardly worth while for us to adopt at this time. ♦ * * This bill pro- 
vides for the making of changes in the legal-tender coin of the country and for 
substituting as legal-tender coin of only one metal instead as heretofore of 
two. I think myself this would be a wise provision, and that legal-tender coins, 
except subsidiary coin, should be of gold alone; but why shonld we lefiflUtt en 

17 



this now when we are not using either of those metals as a circulating medium? 

"The bill provides also for a change in respect of the weight and value of 
the silver dollar, which I think is a subject which, when we come to require 
legislation about it at all, will demand at our hands very serious consideration, 
and which, as we are not using such coins for circulation now, seems at this 
time to be an unnecessary subject about which to legislate." (Page 2310, vol- 
ume 102.) 

Mr. Kelley also said: 

"I wish to ask the gentleman who has just spoken (Mr, Potter) if he knows 
of any government in the world which makes its subsidiary coinage of full 
value? The silver coin of England is 10 per cent, below the value of the gold 
coin, and acting under the advice of the experts of this country and of England 
and France, Jipan has made her silver coinage within the last year 12 per 
cent, below the value of gold coin, and for this reason it is impossible to re- 
tain the double standard. The values of gold and silver continually fluctuate. 
You cannot determine this year what will be the relative values of gold and 
silver next year. They were 15 to 1 a short time ago; they are 16 to 1 now. 

"Hence all experience has shown that you must have one standard coin 
which shall be a legal tender for all others, and then you may promote your 
domestic convenience by having a subsidiary coinage of silver, which shall 
circulate in all parts of your country as legal tender for a limited amount and 
be redeemable at its face value by your Government. But, sir, I again call 
the attention of the House to the fact that the gentlemen who oppose this bill 
insist upon maintaining a silver dollar worth 3i/^ cents more than the gold dollar 
and worth 7 cents more than two half-dollars, and that so long as those pro- 
visions remain you can not keep silver coin in the country." 

On May 27, 1872, the bill was again called up by Mr. Hooper for the pur- 
pose of offering an amendment in the nature of a substitute, and the bill as 
amended passed that day— yeas 110, nays 13. 

Just previous to the passage of the bill Mr. McXeeley, of the Coinage Com- 
mittee, said: 

"As a member of the Committee on Coinage, Weights and Measures, hav- 
ing carefully examined every section and line of this bill, and generally under- 
fitanding the subject before us, I am satisfied that the bill ought to pass." (Page 
3883, volume 104.) 

MR. HOOPER'S SUBSTITUTE. 

The substitute reported by Mr. Hooper and passed by the House, so far as 
it refers to silver coinage, was identical with the bill previously reported from 
the Coinage Committee by him. It was also identical with the bill introduced 
by Mr. Kelley, with the single exception of the provision authorizing the coin- 
age of a silver dollar weighing 384 grains. The bill of Mr. Kelley, so far as 
it related to the silver coinage, was identical with the bill which was prepared 
at the Treasury Department, and which had passed the Senate, excepting that 
the latter bill made the silver coin, a legal tender for all sums less than $1, while 
the bill of Mr. Kelley made the silver coins a legal tender for $5 in any one pay- 
ment. 

The bill was again printed in the Senate on May 29, 1872, and referred to 
the Finance Committee. Senator Sherman, in reporting it back on December 
16, 1872, said: 

"This bill has, in substance, passed both Houses, except that the Senate bill 
enlarged and increased the salaries of the officers of the mint; it was passed 
by the Senate at the session of the last Congress, w ent to the House, and now, 
•omewhat modified, has passed the House at this Congress, so that the bill has 

18 



practically passed both Houses of Congress. The Senate Committee on Finance 
propose a modification of only a single section; but as this is not the same 
Congress that passed the bill in the Senate, I suppose it will haye to go througb 
the form of a full reading unless the Senate are willing to take it on the state- 
ment of the committee, the Senate already having debated it and passed it." 
(Page 203, volume 106, third session Forty-second Congress.) 

After further debate, on motion of Mr. Cole, the bill was printed in full 
with amendments. 

On January 7, 1873, it was again reported with amendmenti, and again 
printed for the inf^ mation of the Senate. It passed that body on January 
17. 1873, after a aiscussion occupying nineteen columns of the Congressional 
Globe. In the course of the debate Senator Sherman said: 

"Tbifi bill proposes a silver coinage exactly the same as the French, and 
what are called the associated nations of Europe, who have adopted the in- 
ternational standard of silver coinage; that is, the dollar (two half-dollars) 
provided for by this bill, is the precise equivalent of a 5-franc piece. It con- 
tains the same number of grams of silver, and we have adopted the inter- 
national gram instead of the grain for the standard of our silver coinage. 
The trade-dollar has been adopted maiuly for the benefit of the people of Cal- 
ifornia and others engaged in trade with China. 

"That is the only coin measured by the grain, instead of by the gram. The 
intrinsic value of each is to be stamped upon the coin. The Chamber of 
Commerce of New York recommended this change, and it has been adopted, 
I believe, by all the learned societie who have given attention to coinage, 
and has been recommended to us, I believe, as the general desire. That is 
embodied in these three or four sections of amendment to make our silver 
coinage correspond in exact form and dimensions and shape and stamp with 
the coinage of the associated nations of Europe, who have adopted an in- 
ternational silver coinage." (Page 672, volume 106. third session Forty-second 
Congress). 

The bill was sent to the House, and on January 21, 1873, on motion of Mr. 
Hooper, it was again printed with amendments, and subsequently commit- 
tees of conference w^ere appointed, consisting of Messrs. Hooper, Houghton, 
and McNeely. of the House, and Senators Sherman. Scott and Bayard, of 
the Senate. The reports of the committees of conference were agreed to, and 
the bill became a law on February 12, 1873, substantially as originally prepared 
at the Treasury. 

The bill as prepared at the Treasury omitted the silver-dollar piece, and 
the report stated the fact of its omission three different times and gave the 
reasons therefor. The silver-dollar piece was omitted from the bill as it first 
passed the Senate. It was also omitted from the bills reported by Mr. 
Kelley; but in the bills reported by Mr. Hooper a new silver dollar was pro- 
posed equal in weight (384 grains) to two of the half-dollars then authorized. 

The Senate substituted a trade dollar weighing 420 grains in place of the 
dollar of 384 grains, in accordance with the wishes of the dealers in bullion 
upon the Pacific coast, that being considered by them as the most advanta- 
geous weight for a coin to be used for shipment to China and .Japan. 

THE BILL WAS REPEATEDLY PRINTED. 

The weight of the subsidiary silver coin was increased about one-half per 
cent, in value, making the half-dollar, quarter-dollar and dime, respectively, of 
the weight of 12% grams, 6^ grams and 2^^^ grams, or precisely one-half, 
one-quarter and one-tenth, respectively, of the weight of the French 5-franc 
piec«. All of «aid coins were madv a lesral tender in nominal ralue for any 

18 



amoimt not exceeding $5 in any one payment. The bill waa read in full in 
the Senate iseveral time&, and the record states on January 9, 1872, that it 
WB» read in the House, It was undoubtedly read at other times. The bill 
waa printed separately eleven times and twice in reports made by the Dep- 
uty Comptroller of the Currency, thirteen times in all by order of Congress. 
It was considered at length by the Finance Committee of the Senate and the 
Coinage Committee of the House during five different sessions, and the de- 
bates upon the bill in the Senate occupied sixty-six columns of the Globe 
and in the House seventy-eight columns of the Globe. 

The Secretary of the Treasury called the special attention of Congress to 
the bill in his annual reports for 1870, 1871 and 1872. In his report of 1872 
he says: 

"In the last ten years the commercial value of silver has depreciated about 
3 per cent, as compared with gold, and its use as a currency has been discon- 
tinued by Germany and by some other countries. The financial condition of 
the United States has prevented the use of silver as currency for more 
than ten years, and I am of opinion that upon grounds of public policy no 
attempt should be made to introduce it, but that the coinage should be lim- 
ited tb commercial purposes, and designed exclusively for commercial uses 
with other nations. 

"The intrinsic value of a metallic currency should correspond to its com- 
mercial value, or metals should be used for the coinage of tokens redeemable 
by the Government at their nominal value. As the depreciation of silver is likely 
to continue, it is impossible to issue coin redeemable in gold without ultimate 
loss to the Government; for when the difference becomes considerable the hold- 
ers will present the silver for redemption and leave it in the hands of the Gov- 
ernment to be disposed of subsequently at a loss. 

"Therefore, in renewing the recommendations heretofore made for the pas- 
sage of the mint bill, I suggest such alterations as will prohibit the coinage of 
silver for circulation in this country, but that authority be given for the coinage 
of a silver dollar that shall be as valuable as the Mexican dollar, and to be fur- 
nished at its actual cost." 1 

Afi a final answer to the charge that the bill was passed surreptitiously, I 
append, first, a copy of the section in reference to the issue of silver coins as 
printed in the report of the Treasury Department and as passed by the Senate; 
second, a copy of the section as reported by Mr. Kelley; third, a copy of the 
section as reported by Mr. Hooper; fourth, a copy of the section as finally passed 
by the Senate and agreed upon by the conference committee. 

The following section was printed in the two reports of John Jay Knox, 
Deputy Comptroller of the Currency, to Congress ; also in Senate bill 859, Forty- 
first Congress, second session, April 28, 1870; in Senate bill 859, December 19, 
1870, and January 11, 1871, third session Forty-first Congress, as reported by 
Mr. Sherman: 

"Seo. 15. And be it further enacted, That of the silver coins the weight of 
the half-dollar, or piece of 50 cents, shall be 192 grains; and that of the quar- 
ter-dollar and dime shall be, resi)ectively, one-half and one-fifth of the weight 
of said half-dollars; that tbe silver coin issued in conformity with the above 
section shall be a legal tender in any one payment of debts for all sums less 
than $1." 

The following section was printed in Senate bill 859, Forty-first Congress, 
third session, February 25, 1871, and House bill No. 5, Forty-second Congress, 
first session, March 9, 1871, as reported by Mr. Kelley: 

"Sec. 15. And be it further enacted, That of the silver coins the weight of 
th« half-dollar, or pie«e of 60 cents, shall be 192 grains; and the quarter-dollar 



and dime •hall be, reepe«tiyely, one-half and one-fifth of the weight of «aid half- 
dollar; which coins ahall be a legal tender, at their denominational ralue, for any 
amount not exceeding ?5 in any one payment." 

The following section was printed in House bill No. 2934, May 29, 1872; 
House bill No. 1427, February 9, 1872, and February 13, 1872, Forty-eecond 
Congress, second session, as reported by Mr. Hooper: 

"Sec. 16. That the silver coins of the United States shall be a dollar, a 
half-dollar or fifty-cent piece, a quarter-dollar or twenty-five cent piece, and a 
dime or ten-cent piece; and the weight of the dollar shall be 384 grains; the 
half-dollar, quarter-dollar, and the dime shall be, respecti-^ ely, cne-half, one- 
quarter, and one-tenth of the weight of said dollar, which coins shall be a legal 
tender, at their denominational value for any amount not exceeding |5 in 
any one payment." 

The following section was printed in House bill No. 2934, December 16, 1872, 
January 7, 1873, and January 21, 1873, Forty-second Congrees, third session, 
as reported by Mr. Sherman: 

"That the silver coins of the United States shall be a trade dollar, a half- 
dollar or fifty-cent piece, a quarter-dollar or twenty-five-cent piece, a dime 
or ten-cent piece; and the weight of the trade dollar shall be 420 grains troy; 
the weight of the half dollar shall be 12^^ grains; the quarter dollar and the 
dime shall be, respectively, one-half and one-fifth of the weight of said half- 
dollar; and said coins shall be a legal tender at their nominal value for any 
amount not exceeding $.5 in any one payment." 

The following section was contained in all of the different bills and the 
coinage act of 1873: 

"Sec. 18. And be it further enacted. That no coins, either of gold, silver, or 
minor coinage, shall hereafter be issued from the mint other than those of the 
denominations, standards and weights herein set forth." 

Copies of the different bills may be obtained at the document room of the 
Senate. 

NOT SURREPTITIOUSLY PASSED IN THE HOUSE. 

THIS BILL WENT TO THE HOUSE OF REPRESENTATIVES. THE 
OFFICIAL RECORD SHOWS THAT IT WAS CAREFULLY CONSID- 
ERED THERE, ESPECIALLY SECTION 16, DROPPING THE OLD DOLr 
LAR. IT IS SOMETIMES SAID THAT NOBODY EXPLAINED THAT 
THE DOLLAR WAS DEMONETIZED. HERE IS THE STATEMENT 
MADE BY MR. HOOPER. WHO HAD CHARGE OF THE BILL, ONE OF 
THE MOST EMINENT MEN WHO HAS BEEN FURNISHED THE 
HOUSE OF REPRESENTATIVES FROM THE STATE OF MASSACHU- 
SETTS. I WILL ASK THAT THE SECRETARY READ WHAT MR. 
HOOPER SAID IN THE DEBATE PENDING THAT BILL. 

Mr. Hooper said, April 9, 1872 (Congressional Globe, part 3, second session 
Forty-second Congrevss, page 2306): 

"Section 16 re-enacts the provisions of existing laws defining the silver eoins 
and their weights, respectively, except in relation to the silver dollar, which is 
reduced in weight from 412i/^ to 384 grains; thus making it a subsidiary 
coin in harmony with the silver coins of less denomination to secure ita con- 
current circulation with them. The silver dollar of 412^4 grains, by rea«on of 
its bullion and intrinsic value being greater than its nominal value, long 
sinee ceased to be a coin of circulation, and is melted by manuf«ctureF» of 
tHw^gwrnm. It do«e not tiir^ialAts mow in •ommereial tranwtioaa with aaj 



country, and the conrenience of those manufacturers in this respect can 
better be met by supplying small stamped bars of the same standard, aroid- 
ing the useless expense of coining the dollar for that purpose. The coinage 
of the half-dime is discontinued for the reason that its place is supplied by 
the copper nickel fiye-cent piece, of which a large issue has been made and 
which, by the provisions of the act authorizing its issue, is redeemable in 
United States currency. 

Mr. SHERMAN. If any man could make a clearer statement of this mat- 
ter than Mr. Hooper did when it was pending, I do not know how it could be 
done. 

Mr. DANIEL. Was that the Congress at which the bill finally passed? 

Mr. SHERMAN. As a matter of course, it was the same Congress. 

Mr. DANIEL. But it was at another session of that Congress, was it not? 

Mr. SHERMAN. It was the first session of that Congress. The bill 
finally passed in the seond session. 

Mr. STEWART. Mr. Hooper did not state in the extract which has been 
read the provision that limited the legal-tender quality to $5. The change of 
weight was the only change he explained, as I understand. 

THE DOLLAR DROPPED OUT HONESTLY AND 

FAIRLY. 

Mr. SHERMAN. It was put in as a subsidiary coin, as stated here ex- 
pressly by this gentleman, in the same section, a section which itself prorides 
that these coins shall be only legal tender for $5. If there was any demoneti- 
zation of the silver dollar, here was a humiliation of it. Instead of being a 
legal tender for all debts, public and private, it was reduced to a subsidiary 
coin by the House of Representatives, upon the motion of the chairman of the 
committee, after as distinct a statement as could be made. The old dollar 
must have blushed then in its old age, that after one hundred year* it should 
not be better placed. 

MR. TRESIDENT, THAT SHOWS THAT IT WAS DONE OPENLY 
AND FAIRLY; THAT ATTENTION WAS CALLED TO IT, AND THAT 
IT WAS DEBATED; BUT, AS A MATTER OF COURSE, THE FULL 
HISTORY OF THE TRANSACTION W^ILL BE GIVEN IN THE EX- 
TRACTS WHICH I HAVE ALREADY QUOTED. The bill finally passed 
the House of Representatives on the 27th of May, 1872. It came to the Sen- 
ate, was referred to the Committee on Finance, and not reported until De- 
cember 16, 1872. We were not in a hurry about it. It was a great measure, 
a heavy measure. It was finally brought before the Senate, and the Senate, 
instead of providing for a dollar of 384 grains, struck that out, and inserted 
the trade dollar, with the history of which the Senate is quite familiar. 
THAT TRADE DOLLAR WAS ONLY A LEGAL TENDER FOR $5. 
IT WAS NOT UNTIL YEARS AFTER, WHEN THAT TRADE DOLLAR 
©AMK INTO GENERAL CIRCULATION HERE, THAT FINALLY THE 

m 



LEGAL-TENDER QUALITY WAS GIVEN TO IT. THE SENATOR 
PROM NEVADA WAS A SENATOR AT THAT TIME, TOO. 

THE TESTIMONY OF EX-SECREf ARY BOUTWELL. 

Mr. President, there is another thing. I have here a statement made re- 
cently by Mr. Boutwell, which I will ask to have read, he being about the only 
survivor of the men who participated in framing that law. He comes out now 
in a broad declaration, not only giving the history of the law, but avowing 
himself as the author of it; and he was the author of it. It was he who 
communicated it to Congress, and he, being the head of the Department which 
sent it to us, manfully came out and avowed his authorship, and it is true 
to my certain knowledge. Mr. Boutwell, in a statement published in the Bos- 
ton Herald, Sunday, July 9, 1893, says: 

Any statement by me touching the financial condition of the country com- 
pels a reference to my policy and acts while I was at the head of the Treas- 
ury Department, and while I acted as a member of the silver commission of 
1876. 

The act known as the act for the demonetization of silver was passed in 
1873, and upon a distinct recommendation made in my annual report to Con- 
gress in December, 1872. The statement so often made and so generally be- 
lieved, that the provision was introduced and passed surreptitiously, was with- 
out any foundation, as will appear from quotations from my report, 
which I shall incorporate in this article. 

The country had due and full notice of the policy proposed, and if the friends 
of a silver currency were ignorant of the movement the fault was their own. 
Not only was there no concealment, but, on the other hand, the change proposed 
was announced early and definitely. For myself, I can say that I never hesitated 
to avow the authorsnip of the measure, and I have been ready always to assign 
the reasons by which I was influenced. 

We were then on a gold basis as far as the use of the metals had a part 
in our financial affairs; we were a principal producer of gold, and the most im- 
portant steps had been taken in the work of bringing the Treasury note to the 
standard of gold coin. 

' In the same report I advised the coinage of a silver dollar, known as the 
trade dollar, in value superior to the Mexican dollar, which was then in use 
almost exclusively in the commerce of China and the Bast Indies. This coin, 
which was not current in the United States, became the means of a very con- 
siderable export of silver to the East. 

My discussion of the contest of 1876 will be ended by the use of one addi- 
tional extract from my report, in which I made a summary of my views: 

"At present the gold dollar of the United States, which contains 25.8 grains 
of standard gold, will purchase a larger quantity of pure silver than is contained 
in the dollar of 412.5 grains of standard silver. 

"The superior value of the gold dollar would prevent its use, and the gold 
coin and the gold bullion of the country would at once be exported to other 
countries, and silver in exchange would be returned, and, when coined, it would 
be introduced into the circulation of the United States. The demonetized 
and discarded silver of every other country would flow to the United States, and 
there can be no doubt that after the first effect of its reinonetization had passed 
away it would steadily depreciate in value. 

"Nor can there be a doubt that our unfortunate experience would furnish an 

23 



argument &g^tntft tbe remonetizalSoii of aUt^ by the commerdsl n&tions of ffe« 

world- 

"It is contended by those who advocate a bimetallic standard for the United 
States, without regard to the policy of other conntries, that its use by us would 
so adranoe its value in the markets of the world that it would be at a par with 
gold. It can only be said in answer to this assumption that there is no evidence 
that such would be the result, while, on the contrary, it is reasonable to anticipate 
that the demonetization of silver in Germany, the limitation of its coinage by 
the nations of the Latin Union, its reduced value in India, and the large produc- 
tion in America would counteract the effect of an increased demand for coinage 
in the United States, and that in a period of ten years its relative value to gold 
would be less than it now is." 

The evils thus anticipated in 1876 have been realized with fearful augmenta- 
tion in this year 1893. 

The bill was brought up again before the Senate for final consideration. 
No doubt the Senate was somewhat weary of it It had already passed the 
Senate in the previous Congress, had been read in full in all its copious length, 
and was then taken up and considered as such a bill is very apt to be which has 
once passed the Senate of the United States. Finally, after debate upon sev- 
eral amendments, it was passed unanimously, and then, at last, I was charged 
with the responsibility for it, when I merely voted with all others for the bill. 

JEFFERSON STOPPED THE COINAGE OF THE 
SILVER DOLLAR IN 1805. 

Mr. (MILLS. I desire to a«k the Senator if he has stated that at one time 
before, about 1805, Mr. Jefferson stopped the coinage of the silver dollar? Did 
he give any reasons for it? Is the Senator familiar with that? 

Mr. SHERMAN. The best statement of his reasons that I have seen 
ifl contained in the report of Mr. Ingham, who was the Secretary of the Treas- 
ury of General Jackson, I think, about the time they were beginning to formu- 
late for passage the bill of 1833. Mr. Ingham gives an interesting statement 
of the action of Jefferson, saying that Mr. Jefferson found that the silver 
dollar being bright and clean and new, and containing a trifle more silver, and 
of more value than the Mexican dollar, should not be iseued; that it was a 
waste of time, the Mexican dollar being also a legal tender; and for thirty 
years after that not a single dollar was issued. 

The action of the Senate wag unanimous. The only important amendment 
made, I think, to this section, or to any section of the bill, was the substitu- 
tion of the trade dollar for what was called the franc dollar. I believe the dollar 
provided for by the House was precisely the equivalent of 5 francs, or two 
half dollars of our subsidiary coin. Then it was made a legal tender for only $5, 
On final action on that bill, the conferees on the part of the Senate were 
Messrs. Sherman, Scott and Bayard. We went into that conference, and erery 
matter was settled promptly, quiekly and deeisirely. 

There never was a bill proposed n the Oonsreis of the United StatM 

U 



which was so publicly and openly presented and agitated. I know of no bill in 
my experience, which was printed, as this was, sixteen times, in order to invite 
attention to it. I know no bill which was freer from any immoral or wrong in- 
fluence than this act of 1873. Not one single word of that act has been impugn- 
ed, but there has been the false allegation made that the silver dollar was sur- 
reptitiously omitted from the coinage. No fact can be proved more clearly and 
fully than that it is a falsehood and a lie by whomsoever uttered. 

THE EBNEST SEYD TABLE. 

Mr. President, there has been an invention of a story in connection with 
Ernest Seyd. I suppose Senators have often heard of the story. Some fellow- 
some man, I will call him, for it might insult him to call him a fellow— whose 
name I do not recall, made an affidavit that he knew Ernest Seyd; that he had 
often met him at his own table; had often dined with him, and at one time, 
when they were in conversation, he said that the Parliament of Great Britain 
wa« corrupt. Mr. Seyd then said "They are nothing like the Congress of the 
United States; that is the most corrupt body that ever existed." He then went 
on in a confidential conversation, according to the statement of this man, who- 
ever he is. 

Seyd eaid he would tell him a secret, if he would pledge himself never to re- 
veal it while he (Seyd) lived. He promised to wait until Seyd died. Thereupon 
Seyd said to him tiiat he had raised a fund of £100,000 in the winter— now, 
mark the time— of 1872-'73 to bribe Congress to demonetize silver; and, vdth 
a wink, he conveyed the idea to this man, whoever he was, that he had done it, 
and said that that was a greater act of corruption than had ever occurred in the 
British Parliament. 

Three or four years after Seyd died this man revealed this important secret, 
which has made all thi« turmoil, and which has disturbed the country about the 
act of 1873. 

Mr. President, such a story as that, told under these circumstances, would be 
hooted at by any lawyer or any honest man. Unfortunately for him, the man, as 
all rogues are apt to do, gave himself away; for in the end of this letter he 
declares himself an anarchist, opposed to all governments and all property; and 
yet he made an affidavit of this kind, which had no legal force or effect It is fal- 
sified in every single line and word. 

In the firet place, according to all the information I can get, Mr. Seyd wa» 
a gentleman, and probably one of the finest writers upon the subject of metal- 
lism in the world. I never saw him, and only know him by his works. X have 
here a book which I obtained from the library, of the date of 1871, in reference 
to the metallic currency of the United States of America, by Ernest Seyd, a mem- 
ber of the council of the Statistical Society of London. I venture to say that 
there is Dot upon this class of subjects a work of greater flccumrr. of more thor- 
oughness, and clearer, sounder views than are contained in this little book el 

m 



Ernest Seyd, who is how dead and gone, and whom this man. whatever his name 
may be, misrepresents. 

TE£ BEFAMER OF SITD BEANDED AS A LIAR. 

Mr. Seyd, in a letter which, thank God, we have now here before us, 
showed that he retained his views upon bimetallism, and that he never could 
have uttered such language as this obscure anarchist and enemy of mankind 
attributes to him. It stamps the statement of that man as a lie made out of 
whole cloth, to arouse and aggravate the good, sensible, honest people of this 
country. Wherever he is, if he is alive, I brand him here as a liar, so proved by 
evidence which cannot be gainsaid. Yet upon such stuff as that the members 
of the Congress of the United States are to be assailed as corrupt; men who 
would not stain their honor for all the gold in the world are to be held up before 
popular audiences as corrupt and dishonest, with hands and hearts stained 
with bribery. 

Mr. President, I say that such things ought not to exist, and I hope now 
that the good people of the United States, as I shall put all this evidence in 
form, will read it, and banish forever the belief that Congress can be cor- 
rupted. 

Before the time this man says Mr. Seyd came here, that law had passed 
both Houses with the silver dollar dropped from the coins of the United States. 
Mr. Seyd was against the exclusion of the dollar, and in his book he criticises 
specially the acts of 1834 and 1837 and the act of 1853, because they surren- 
dered the principle of bimetallism. 

This bill passed the House in April, 1872. It first passed the Senate, I 
think, in February, 1871. It again passed the Senate and became a law in 
1873. 

My friend from Nebraska (Mr. Manderson) calls my attention to an impor- 
tant fact, which is, that the letter of Mr. Seyd was dated February 17, 1872, at 
1 A Princess street, Bank, London. So that Mr. Seyd must have been in London 
in February, 1872, and wrote there against the very clauses which it is charged 
were corruptly put in the bill, induced by bribes paid by him. 

Mr. McPHERSON. Will the Senator have that letter published with his 
remarks? 

Mr. SHERMAN. It is almost too long. 

Mr. MANDERSON. It has already been printed in the Record. 

Mr. McPHERSON. Very well; if it has been already" published, that will 
answer. 

Mr. SHERMAN. The letter is dated long before Mr. Seyd is said to have 
come here. Mr. Hooper probably invited him to come here, but it must have 
been after this letter was written. He came here a known bimetallist, who had 
committed himself not only in a book but by letter; and now, according to this 
anarchist, he came here and bribed Congress in the winter of 1672-'73 with 

26 



$500,000 to do what both Houses had done long before! That is the way the 
thing stands now, because the bill had passed both Houses before Seyd could 
hare come here, and he was opposed to it absolutely, and in clear and forcible 
language depicts the consequences which would follow the demonetization of 
silrer by the countries of Europe and by the United States. 

GEN. GRANT AND THE DEMONETIZATION ACT. 

It is sometimes said that General Grant did not know of the demonetization 
of silver. Well, what of it? General Grant was not a financier nor a metallist 
nor a monetary expert, but he was a brave, strong, noble man. He might truly 
have said this, but he could also hare said, if he had seen fit, that his Secretary of 
the Treasury, his chosen officer, in a document only second in importance to that 
of a message of the President of the United States, had, in December, 1872, just 
before the passage of this act, urged Congress to pass the act, and gave as a 
reason that, unless it was passed, we would be disturbed by the falling of silver 
in the markets of the world. GENERAL GRANT MIGHT HAVE SAID 
THAT HE DID NOT READ THE REPORT OF THE SECRETARY OF 
THE TREASURY. BUT HOW CAN MEMBERS OF CONGRESS MAKE 
SUCH A PLEA AS THAT? THEIR BUSINESS IS TO WATCH AND 
GUARD THE INTERESTS OF THEIR CONSTITUENTS AS WELL AS 
THE COMMON GOOD OF THE WHOLE PEOPLE OF THE UNITED 
STATES. 

Sir, I would rather stand this day before you defending a law which hag 
been denounced and villified, as this has been, boldly avowing that I did read the 
law and that I knew its contents, than to plead the baby act, and say I did not 
know what was pending here before us for two or three years as an act of legis- 
lation. THAT LEGISLATION DROPPING OUT THE SILVER DOLLAR 
WAS IN THAT BILL FROM THE BEGINNING TO THE END, AND 
NEVER WAS ERASED FROM IT. THE SENATOR FROM NEVADA 
SAID HE DID NOT REMEMBER. VERY WELL. IT SEEMS TO ME 
THAT, REPRESENTING 53,000 INTELLIGENT, ACTIVE, INDUSTRI- 
OUS PEOPLE WHOSE WHOLE FORTUNES WERE INVOLVED IN 
THE MINING OF SILVER AND GOLD, HE OUGHT TO HAVE KNOWN 
WHETHER THE DEAR DOLLAR OF THE DADDIES WAS DEAD 
AND GONE OR NOT. (Laughter.) 

SENATOR STEWART'S PLEA FOE TEE GOLD 
STANDARD. 

I take him, however, at his word. The law was passed in February, 1873, 
and I do know that within a year from that time the Senator from Nevada 
knew that silver was demonetized, because he said so; and he said it Feb- 
ruary 11, 1874, as will appear in the document wiiich I have here before me, 
and to which I give him a reference, so there can be no mistake about it. On 

27 



page 1392, volume 2, part 2, of the Congressional Record, first session, Porty- 
fhird Congress, be said: 

I Trant tlie staudard g^old, nnd no paper rAoney not redeemable In 
sold; no paper money tlie value of wticli is not ascertained; no paper 
money tbat Trill org^Hnize a gold board to speculate in it. 

Again only a week or two after this, on the 20th of February, to be found 
in Congressional Record, Volume 2, part 2, page 1677, when he was speaking 
in favor of the resolution instructing the Committee on Finance to report a bill 
providing for the convertibility of Treasury notes into gold coin or 5 per cent. 
bonds, he said: 

By tbis process vre sball come to a specie basis, and vrhen tbe la- 
boring man receive-* a dollar it Tvill bave tbe purcbasing poorer of a 
dollar, and be vrill not be called npon to do Tvbat is impossible for bim 
or tbe producing classes to do, figure upon tbe excbangcs, figure npon 
tbe fluctuations, figure upon tbe gambling in New York; but be Trill 
knoTT Trbat bis money is vrortb. Gold is tbe universal stand&rd of 
tbe TTorld. Everybody knows vrbat a dollar in gold is Trortk. 

(Laughter.) 

WESTERN MINING ASSESSMENTS PAYABLE 
IN GOLD. 

MR. PRESIDENT, THE SENATOR FROM NEVADA, IN MAKING 
THESE DECLARATIONS, FAIRLY AND TRULY REPRESENTED THE 
PEOPLE OP HIS STATE, BECAUSE FROM THE BEGINNING OF THE 
WAR UP TO THIS HOUR THEY HAVE REFUSED TO TAKE 
ANYTHING BUT GOLD COIN OF THE UNITED STATES. I HAVE 
HERE TWO DOCUMENTS. ONE IS THE VIRGINIA (NEV.) CHRONI- 
CLE OF SATURDAY, AUGUST 12, 1893, ONLY A SHORT TIME AGO. 
THERE IS CONTAINED IN THIS NEWSPAPER NEARLY HALF' A 
PAGE, OR PERHAPS A THIRD OF A PAGE, OF ADVERTISEMENTS 
BY VARIOUS MINING COMPANIES CALLING FOR ASSESSMENTS 
"PAYABLE IN UNITED STATES GOLD COIN;" EVERY ONE OF THEM 
HAS THE STIPULATION "PAYABLE IN UNITED STATES GOLD 
COIN." 

THEY DO NOT TAKE PAPER MONEY, OR AT LEAST THEY AD- 
VERTISE THAT THEY DO NOT, NOR SILVER MONEY, ALTHOUGH 
THEY REQUIRE US TO BUY ALL THE SILVER THEY PRODUCE 
AT ITS MARKET VALUE AND COMPLAIN BECAUSE WE DO NOT 
PAY $1.29 AN OUNCE FOR IT IN GOLD WHEN WORTH IN THE 
MARKJflT ONLY 73 CENTS; AND YET THEY DEMAND OF THEIR 
OWN PEOPLE— THEIR OWN STOCKHOLDERS— THE PAYMENT OF 
THESE ASSESSMENTS IN GOLD COIN. 



THE SAME PRACTICE EXISTS IN CALIFORNIA. I HAVE HERB 
THE SAN FRANCISCO NEWS-CIRCULAR. THE WHOLE OF THAT 
PAGE OF THIS CIRCULAR (exhibiting) CONTAINS ASSESS- 
MENT NOTICES OF SILVER-MINING COMPANIES, AND EVERY 
ONE OF THEM REQUIRES THE ASSESSMENTS TQ BE PAID IN 
UNITED STATES GOLD COIN. THEREFORE, I MUST DEFEND 
THE SENATOR FROM NEVADA FROM ANY IMPUTATIONS WHICH 
MIGHT BE MADE THAT HE HAS NOT REPRESENTED HIS CON- 
STITUENTS. HE IS REPRESENTING THEM, NOT ONLY IN DE- 
MANDING GOLD COIN FOR EVERYTHING THAT IS PAID TO THEM, 
BUT TENDERING SILVER BROADLY. AT ITS RATIO PRICE, TO 
ANYBODY TO WHOM THEY WANT TO SELL IT. NOW, THEY ARE 
SHARP; THEY ARE KEEN. I HAVE ALWAYS HEARD THAT THE 
MINERS OF THE WEST ARE ABOUT THE KEENEST MEN IN THE 
COUNTRY; AND FROM THE SPECIMENS WE HAVE AROUND US I 
AM RATHER INCLINED TO THINK THEY ARE TOO SHARP FOR 
A BUCKEYE YANKEE. (Laughter). 

THE BILL PRINTED SIX TIMES IN TEE HOUSE. 

Now, Mr. President, to resume for a moment the history of the act of 1873: 
It was framed in the Treasury Department after a thorough examination by 
experts, transmitted to both Houses of Congress, thoroughly examined and 
debated during four consecutive sessions, the information called for by the 
House of Representatives and printed six times by order broadly circulated, and 
many amendments were proposed, but no material changes were made in the 
coinage clause from the beginning to the end of the controversy. It added the 
French dollar for a time, but that was superseded by the trade dollar, and 
neither was made a legal tender but for $5. IT PASSED THE SENATE 
ON THE lOTH OF JANUARY, 1871—36 YEAS AND 14 NAYS— EVERY 
SENATOR FROM THE PACIFIC COAST VOTING FOR IT. 

IT WAS INTRODUCED IN THE HOUSE OF REPRESENTATIVES 
BY MR. HOOPER AT THE NEXT SESSION. IT WAS DEBATED, 
SCRUTINIZED AND PASSED UNANIMOUSLY, DROPPING THE SIL- 
VER DOLLAR AS DIRECTLY STATED BY MR. HOOPER. IT WAS RE- 
PORTED, DEBATED, AMENDED AND PASSED BY THE SENATE 
UNANIMOUSLY. IN EVERY STAGE OF THE BILL AND EVERY 
PRINT THE DOLLAR OF 4121/2 GRAINS WAS PROHIBITED, AND 
THE SINGLE GOLD STANDARD RECOGNIZED, PROCLAIMED AND 
UNDERSTOOD. IT WAS NOT UNTIL SILVER WAS A CHEAPER 
DOLLAR THAT ANYONE DEMANDED IT, AND THEN IT WAS TO 
TAKE ADVANTAGE OF A CREDITOR. 

Now, it has always been within the power of Congress to correct this error, 
if error was made; but Congress has refused over and over again to do it When 
the controversy arose about the Bland bill and the House of Representatives piro- 

89 



posed the free coinage of silver, the Senate rejected it after a deliberate con- 
test and substituted in place of it what is called the Bland-Allison act, which re- 
quired the purchase of silver bullion at its market value and its coinage to a 
limited amount. Every effort has been made from that time to this to have the 
Congress of the United States pass a free coinage act. 

As I said before, shortly after the passage of the Bland-Allison act, and 
from that time on there was a constant debate going on in Congress, and finally 
Congress raised the amount of silver bullion to be purchased to four million and 
a half ounces by the act of 1890. The question then was between the free coin- 
age of silver and the purchase of silver in a limited amount to be coined at the 
pleasure of the Government as it was needed. The same question is upon us 
now in the difficulties which surround us, and it is time that the question should 
be definitely and finally settled. 

AN INTERNATIONAL AGREEMENT NECESSARY. 

Mr. President, it ii Raid that if we atop the coinage of silver it will be the 
end of silver. I have heard here that moan from some of my friends near me, 
that it will be the end of silver. I do not think it will be the end of silver. We 
have proven by our purchases that the mere purchase of silver by us in a declin- 
ing market, when all the nations of Europe are refusing to buy silver and throw- 
ing upon us their surplus, is an improvident use of the public money, and it 
ought to be abandoned, or at least suspended until a time shall come when we 
may, by an international ratio or by some other provision of law, prevent the pos- 
sible coming to the single standard of silver. Now, that can be done. 

I SAY THAT INSTEAD OF DESIRING TO STRIKE DOWN SILVER 
WE WILL LIKELY BUILD IT UP; AND ANY MEASURE THAT COULD 
BE ADOPTED FOR AN INTERNATIONAL RATIO THAT WILL NOT 
DEMONETIZE GOLD WILL MEET MY APPROBATION AND FAVOR. 
BUT I WOULD NOT DISSEVER THE FINANCIAL BUSINESS OF THIS 
GREAT COUNTRY OF OURS, WITH ITS 65,000,000 OF PEOPLE, FROM 
THE STANDARDS THAT ARE NOW RECOGNIZED BY ALL THE 
CHRISTIAN NATIONS OF EUROPE. I WOULD NOT HAVE OUR 
MEASURE LESS VALUABLE THAN THE MEASURE OF THE PROUD- 
EST AND HAUGHTIEST COUNTRY OF THE WORLD. 

Mr. President, this is not a question of the mere interest of Nevada or Col- 
orado. It is not a question about what Wall street will do. They will always 
be doing some deviltry or other, it makes no difference who is up or who is down. 
We take that as a matter of course. The question is what ought to be done for 
the people of the United States in their length and breadth. If Congress should 
say that in its opinion it is not now wise after our experience to continue the 
purchase of silver bullion, is any injustice done to Colorado or Nevada? Are we 
bound to build up the interest of one section or one community at the expense of 
another or of the whole country? 

30 



OUR FINANCIAL INTEGRITY MUST BE 

MAINTAIMl®. 

If the fight must be for the possession of gold, we will use our cotton and 
our com, our wheat and other productions, against all the productions of man- 
kind. We, v.-ith our resources, can then enter into a financial competition. We do 
not want to do it now. We prefer to wait awhile until the skies are clear and 
see what will be the effect of the Indian policy, and what arrangements may be 
made for conducting another international conference. In the meantime let the 
United States stand upon its strength and credit, maintaining its money, differ- 
ent kinds of mone^, at a parity with each other. If we will do that I think soon 
all these clouds will be dissipated and we may go home to our families and friends 
with a conscientiousness that we have done good work for our country at large. 
(Applause in the galleries.) 



Senator Jones, of Nevada, on Gold, 

[From His Speech in tiie Senate, April i, 1874.] 



Does this Congress mean now to leave entirely ont of view and to 
discard forever a standard of value? Did any country ever accumu- 
late wealtli, acliieve greatness, or attain a high civilization without 
such standard? And what but gold can be that standard? What 
other thing on earth possesses the requisite qualities? 

Its value is represented by the average amount of labor required to produce 
it. Its scarcity gives a small quantity of it great value, so that it is easily 
transported from place to place. It is capable of division and subdivision, and 
also of being reunited— all without loss. It is in every commercial country made 
into coins and stamped, by national authority, with a certificate as to fineness and 
weight. It is flexible and self-regulating, and flows by natural laws wherever 
the exigencies of trade demand it. 

Gold is the articulation of commerce. It is the most potent agent 
of civilization. It is gold that has lifted the nations from barbarism. 
It has done more to organize society, to promote industry and insure 
its rewards, to inspire progress, to encourage science and the arts 
than gunpovrder, steam and electricity. 

The use of gold had its origin in the necessities of mankind. The human 
heart is set upon it. It will command the proper services of everybody at all 

31 



times and in all places. The necessities which compel its use are inexorable to- 
day as they were at the beginning, although improved systems of exchange have 
diminished the proportionate volume necessary to do the work. 

So exact a measure is it to Imman effort tliat wlien it is exclusive- 
1t nsed as money it teaclies tlie very liabit of honesty. It neither 
deals in nor tolerates false pretenses. It cannot lie. It keeps its 
promifiies to ricli and poor alike. 

While it has seen human institutions perish and human governments crumble 
and decay, it is itself imperishable. The gold that was in Solomon's temple pos- 
sessed the same qualities as the gold dug to-day from the sands of Africa. The 
gold of California and the gold of Australia are precisely the same. It defies 
the corroding hand of time and the friction of the ages. It is the common 
denominator of values. It makes possible the classification of labor and the 
equitable interchange of commodities. Gold has intervened in the bargains made 
between men since the dawn of civilization, and it has never failed to faithfully 
fulfill its part as the universal agent and servant of mankind. But it with- 
draws from the companionship of the bendizened harlot called irredeemable 
paper money, and says to every people, "Banish her before you look for my 
return." It is the oxygen in the commercial atmosphere, and its absence pro- 
duces financial asphyxia. 

The value of gold is not affected by the stamp of government. That is 
merely the final and reliable evidence of its weight and fineness. 

You must have something with the attribute of extension when you measure 
extension; to measure weight you must have something of specific gravity, and 
to measure value you must have something of value — something that requires 
labor to produce it. Gold has this requisite. The stamp on a gold dollar says 
in effect: "This Government pledges its honor that this coin is nine-tenths fine 
and contains 25.8 grains in weight." 



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